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How to calculate economic order quantity

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Purchase price of each box $200

Cost of placing and receiving an order $100

Cost of storing one box $4/year

Minimum usage per day 4 boxes

Maximum usage per day 8 boxes

Lead time for an order 5 days

The key ingredients come only in one Kg boxes and can make up to 20 meals per box. The restaurant is open 50 weeks a year and for 6 days a week.

Problem 1:  how to calculate EOQ (economic order quantity)

Reference no: EM132576921

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