Determine the economic order quantity

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Reference no: EM13844876

The demand for spring water at the SLC WalMart is 600 liters per week. The setup cost for placing an order to replenish inventory is $25. The order is delivered by the supplier which charges WalMart $0.10/liter for the cost of transportation from the Rocky Mountains to SLC. This transportation cost increases the cost of water to $1.25/liter. The water loses its freshness while stored at the SLC WalMart. To account for this, the WalMart charges an annual holding cost of $2.6/liter.

1. Determine the WalMart’s Economic Order Quantity (in liters)?

2. How often should WalMart order for water (in weeks)?

Reference no: EM13844876

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