Ordering and carrying costs by using the EOQ

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Reference no: EM132141370

A produce distributor uses 780 packing crates a month, which it purchases at a cost of $8 each. The manager has assigned an annual carrying cost of 40 percent of the purchase price per crate. Ordering costs are $28. Currently the manager orders once a month.

How much could the firm save annually in ordering and carrying costs by using the EOQ? (Round intermediate calculations and final answer to 2 decimal places. Omit the "$" sign in your response.)

Savings $ per year

Reference no: EM132141370

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