EOQ) A book store is trying to determine the optimal oder quantity for a popular

Question

EOQ) A book store is trying to determine the optimal oder quantity for a popular noval printed in a backpaper. The store feels that the book will sell ay four times its hardback figures. It would therefore sell approx 3000 copies in the next year at a price of $1.50. The store buys a book at a whole sale of $1. Cost for carrying the book estimated at $0.30 a copy per year and it cost $ 30 to order more books a. determine Economic order Qantity (No. of copies nearest to the whole number) b. what would be the total cost for ordering the books five time a year? ( nearest dollar)

Explanation / Answer

Q1 Annual Demand          3,000.00 Ordering cost per order                30.00 Carrying cost per Book                   0.30 EOQ = Under Root (2*A*O)/C EOQ = Under Root (2*3000*30)/.30 EOQ = Under Root (180,000)/.30 EOQ = Under Root (600,000) EOQ = 774.59 b) Total Ordering cost = 5*30 = 150

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