What is optimal order quantity

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Reference no: EM133642794

Question

A retailer buys soft drink bottles from a supplier in South America. The supplier charges $0.4 for each bottle of the soft drink. It costs the retailer $500 to transport a batch of bottles from the supplier's factory to its store, and this cost does not change with number of bottles being shipped. The retailer faces steady demand of 5000 bottles per year, and its annual percent inventory holding cost is 30%. What is optimal order quantity (i.e., EOQ) the retailer should order?

Reference no: EM133642794

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