What is the number of orders per year

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A company manufactures harnesses for horses. It requires 5000 metres of leather per month. The company buys the leather from a supplier at a cost of R150 per metre. The company's inventory carrying cost is estimated to be 5% of the metre cost of leather and the ordering cost is R70 per order.

You are required to answer all of the questions below.

Question 1: Calculate the EOQ.

Question 2: What is the number of orders per year?

Question 3: Compute the total cost.

Question 4: Provide a discussion on the relevance of the assumptions of the economic order quantity model in today's economy.

Reference no: EM132584083

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