The Allianz Company produces a specialty wood furniture product, and has the following information available concerning its inventory items:

Annual demand is 33,000 packages per year. The purchase price per package is $49.
What is the economic order quantity?

Question

The Allianz Company produces a specialty wood furniture product, and has the following information available concerning its inventory items:

Annual demand is 33,000 packages per year. The purchase price per package is $49.
What is the economic order quantity?

Quizplus · Accepted Answer

Unit carrying costs = ($49 × 0.18) + $5 = $13.82
EOQ = 11ea1398_f0eb_4b03_a1e4_673f9ae687a4_TB3027_11 = 1498.19 units

The Allianz Company Produces a Specialty Wood Furniture Product, and Has