ERP system uses EOQ to help minimize ordering costs

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Reference no: EM132248185

Your company's new ERP system uses EOQ to help minimize ordering costs. You are testing its calculations and see the following information the company's financials:

Three-year average flexible pipe consumption: 2180 feet per year.

You use a small warehouse to hold your equipment and pipe. Your cost accountant estimates that your holding cost per pipe foot is $1.20 per year.

Buying the materials needed requires more time than you thought. The part-time person whose only function is to do all of your buying says that he processes 900 purchase orders per year and his average pay has been $15600 per year.

What is the EOQ for pipe in feet? (Your answer should be in whole feet).

Reference no: EM132248185

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