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Mathematics & Economics
Quanitive Analysis (Math Problem Sample)
Introduction: A variety of criteria and techniques can be used to determine how many units .......................................................please refer to the APA Handout web link included in the General Instructions section. source..
Economic Order Quantity formula is useful in determining the optimum production capacity that will result in the most cost saving options that is the minimum holding cost and ordering cost which are total annual costs. EOQ application is possible where the demand is constant over the period and all costs to be incurred are fixed.
The EOQ Formula is:
A= Annual Consumption B= Buying cost per order
C= Cost per unit S= Storage and carrying cost
In part A:
A= 18000 units B= $38
C= $12 S= 26% of inventory
EOQ = QUOTE
= 662 units
The company’s optimum order size should be 662 units in order to minimize the total annual costs.
In Part B...
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