Associated ordering and holding costs

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Reference no: EM131637407

An assistant manager of Costco is reviewing the costs associated with one of the store’s better-selling products. The data available follows.

Demand = 2500 units/month

Order cost = $400/order

Holding cost = $10/unit/year

a. What would be the EOQ and its associated ordering and holding costs?

b. If the holding cost is actually $12 per unit per year and all other information remains the same, what is the new EOQ and the total annual inventory cost?

Reference no: EM131637407

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