Total annual inventory and purchasing cost

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Reference no: EM13752090

You are the purchasing manager of a hospital. The hospital uses a particular medical product more or less constant at 7871 units per year. You purchase the product from a supplier for $80.97 per unit. It costs about $11.4 per unit to store the product in the hospital inventory. The hospital accountant estimates that the cost of placing an order and processing a shipment from the supplier is about $41. The hospital operates 365 days a year. Assuming EOQ model is appropriate for this problem, the total annual inventory and purchasing cost is __________ dollars if you use the optimal order quantity.

Reference no: EM13752090

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