A manufacturing company wants to know the optimal amount to order of part number 45612.It should gather appropriate inventory information about the part and then calculate the part's
A) inventory usage rate.
B) lead time.
C) economic order quantity.
D) reorder point.

Question

Quizplus · Accepted Answer

To determine the optimal amount to order, the company needs to calculate the economic order quantity (EOQ) which takes into consideration the demand rate, holding cost, and ordering cost. The inventory usage rate (A) and lead time (B) are important factors to consider in the calculation of EOQ, but they are not the final output. Reorder point (D) is not directly related to determining the optimal amount to order, but it is important to set the level of inventory at which the company needs to reorder.

A Manufacturing Company Wants to Know the Optimal Amount to Order