A Firm That Makes Electronic Circuits Has Been Ordering a Certain

question 98

Essay

A firm that makes electronic circuits has been ordering a certain raw material 250 ounces at a time. The firm estimates that carrying cost is I = 30% per year, and that ordering cost is about $20 per order. The current price of the ingredient is $200 per ounce. The assumptions of the basic EOQ model are thought to apply. For what value of annual demand is their action optimal?

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Definitions:

Effectance Motivation

The intrinsic motivation to interact with, manipulate, and control one’s environment, often seen in exploratory and playful behaviors.

Reciprocal Causation

A concept where personal behavior, the environment, and individual thoughts influence each other in a loop.

Complex Interplay

The intricate interaction or co-operation of multiple factors or elements in a system or situation.

Environmental Factors

External elements, including social, economic, biological, and physical conditions, that can influence an individual's or species' development and behavior.