Safari Industries requires part XC-4 to manufacture one of its most popular products.Safari produces 32,000 units of this popular product each year, it costs Safari $12 per unit in holding costs, and order costs are $240.In order to minimize inventory costs, Safari wants to determine the economic order quantity and its total inventory costs if it implements EOQ. Safari's total annual inventory cost is approximately: (Round your intermediate calculations to whole dollars.)

Question

Quizplus · Accepted Answer

EOQ = √(2*D*O)/H = √(2*32,000*$240)/$12 = 1,600 unitsTotal inventory costs = (D/Q)*O + (Q/2)*H = (32,000/1,600)*$240 + (1,600/2)*$12 = $13,512

Safari Industries Requires Part XC-4 to Manufacture One of Its