Solution-Determine the economic order quantity

Determine the economic order quantity

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Reference no: EM135296

The E.O Queue Hospital is trying to evaluate how many bedpans to buy at a time. They use just about 2000 per year. Each bedpan costs the hospital $4. The hospital evaluates their capital cost at a rate of 10 percent of the purchase price. Additional carrying cost are 60cent per unit. Every time the hospital places an order for bedpans, the labor cost in the purchasing department is $16 the handling and shipping cost for the order is 20 dollars, and other costs related to making an order are 4 dollars.

a) Determine the economic order quantity?

b) Consider that they could get a 10 percent discount per bedpan if they order at least 1000 at a time. Should they take advantage of this discount?

Reference no: EM135296

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Determine the economic order quantity

Reference no: EM135296

Reference no: EM135296

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