Answer the following question(s) using the information below:
The Wood Furniture Company produces a specialty wood furniture product, and has the following information available concerning its inventory items:
Annual demand is 10,000 packages per year. The purchase price per package is $16.
-What is the economic order quantity for Wood Furniture Company?

Question

Answer the following question(s) using the information below:
The Wood Furniture Company produces a specialty wood furniture product, and has the following information available concerning its inventory items:
  Annual demand is 10,000 packages per year. The purchase price per package is $16.
-What is the economic order quantity for Wood Furniture Company?

Quizplus · Accepted Answer

Unit carrying costs = ($16 × 0.10) + $1.40 = $3
EOQ = The square root of [(2 × 10,000 × $150)/$3] = 1,000 units

Answer the Following Question(s) Using the Information Below