Calculate the economic order quantity

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Question: Eric owns a ski shop where he sells a variety of ski equipment. Every year, it costs him $400 of inventory cost per unit of equipment. The order cost for each order is $1,000. He imports ski equipment abroad by placing one order of 200 units every month. He is wondering if he can save total costs by adopting the EOQ model.
(a) Calculate the economic order quantity (EOQ) (namely how many orders to place very year in order to minimize the total cost

Reference no: EM133388891

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