Major assumptions of basic eoq model

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Reference no: EM131805355

Your manager has tasked you to identify a supplier based on EOQ calculations. The demand of a product is 800 units per month, holding cost is estimated to be 50% of the purchase price, and estimates of order costs per order is $50 per order.

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a) What are the major assumptions of basic EOQ model?

b) What is the economic order quantity for each supplier?

c) What is the total cost for the most economic order size? The cost schedules of two suppliers are as follows:

b) What quantity should be ordered and which supplier should be used?

Reference no: EM131805355

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