Compute optimal total annual cost-economic order quantity

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Reference no: EM132126799

Consider a trading company located an industrial complex that sells electronic components. Due to its location, when an order is placed, it is instantaneously replenished. The most popular product is a RFID reader, which has an annual demand of 4,000 units and the purchasing price per unit is $80. The selling price of a RFID reader is $100. The annual interest rate is 10% and the average ordering cost is $40 per order. Compute the optimal total annual cost, the economic order quantity, and the optimal order interval for RFID readers.

Reference no: EM132126799

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