Stanford Ltd.purchases 1,600,000 units of its product every year.The ordering costs are $50 per order and the annual carrying cost of one unit is $1.60.Under its current inventory policy, it purchases the units 80 times during the year, in batches of 20,000 units per order.Required:
a.Calculate the EOQ for Stanford Ltd.
b.By ordering at the EOQ, how much in inventory costs will Stanford Ltd.save per year?

Question

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The Answer of Stanford Ltd.purchases 1,600,000 units of its product every year.The ordering costs are $50 per order and the annual carrying cost of one unit is $1.60.Under its current inventory policy, it purchases the units 80 times during the year, in batches of 20,000 units per order.Required:
a.Calculate the EOQ for Stanford Ltd.
b.By ordering at the EOQ, how much in inventory costs will Stanford Ltd.save per year?