Canada ManuAssume that Canada Manu. Inc. uses 2,000,000 tonnes of material each year. Further, assume that Canada Manu can order the material at a cost of $10 per tonne, plus fixed ordering costs of $100 per order. The firm's carrying cost is 5% of the inventory value, at cost.
-Refer to Scenario: Canada Manu.What is the Canada Manu's EOQ?

Question

Quizplus · Accepted Answer

The Economic Order Quantity (EOQ) is calculated using the formula: EOQ = sqrt((2DS)/H), where D is the demand (2,000,000 tonnes), S is the ordering cost ($100), and H is the carrying cost per unit ($10 * 5% = $0.50). Plugging in these values gives EOQ = sqrt((2*2,000,000*100)/0.50) = 28,285.

Canada ManuAssume That Canada Manu