Considering ordering colgate toothpaste for its stores

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A buyer at the discount retailer Target is considering ordering Colgate toothpaste for its stores. Demand for Colgate toothpaste is estimated to be 31,200 tubes per year. The fixed cost of an order- including administrative, transportation, and receving- is estimated to be $155 per order. The unit annual holding cost is $0.90 per unit per year. The unit purchase price is $3.00.  Assuming you can only order in multiples of 100 tubes (e.g. 2200 tubes, 2300 tubes, etc.), what order quantity minimizes total annual inventory costs (i.e. holding, setup, and material costs).

(Note: With the exception of the order being multiples of 100, all EOQ assumptions apply)

Reference no: EM132225511

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