What is the economic order quantity-associated total cost

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Reference no: EM132268722

A new novel by John Irving will be published February 1st 2018, and bookstores are currently placing their orders for the book. Books4U expects to sell 100 copies of the book each month during the upcoming years. It costs Books4U $250 to place an order, and the annual holding cost rate is 20%.

Books4U orders 600 copies each time an order is placed. The price per book when ordering 600 copies is $25.

1. Compute the associated total cost per year, i.e., the annual total holding, ordering, and buying cost.

2. What is the Economic Order Quantity (EOQ) and the associated total cost per year?

Reference no: EM132268722

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