Best quantity to balance ordering cost and carrying cost

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Hector Lopez, the new inventory manager for Xtreme Golf Supplies, is considering using the economic order quantity for top selling inventory items. He has asked you to apply the EOQ to one example product, the Super Lob Wedge. This inventory item has an Annual Demand of 900 units with an ordering cost of $30 per order. The carrying cost for the Super Lob Wedge is 10% and the inventory unit cost is $45. a. Use the EOQ formula to calculate the best quantity to balance ordering cost and carrying cost. b. Use the exact EOQ number to calculate the Total Cost ( which is Annual Ordering cost plus Annual Carrying cost).

Reference no: EM131709590

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