Inventory Management: Economic Order Quantity (EOQ)

This video demonstrates how to apply the Economic Order Quantity (EOQ) model to inventory management.

[AlmostCoast]

Hey, Dr. Morpurgo. Can you explain the concept of annual holding costs? Why are we using EOQ/2 * Ch (holding cost per unit)? Shouldn't we also multiply this by the number of orders for the year? So holding costs are, for example, 200/2 * 2=$200, but we also multiply this by 10 (nr. of orders) as we are holding this number 10 times a year - thus incurring the costs 10 times.
Am I completely misunderstanding the concept?
Thanks

[ChristyKrohne]

I cant get to the 493, 71. In order to get to 493.71; Is it 2x19500 = 3900, as well as 2x25 = 50?. Then 39000 + 50 / 4? PLEASE, can you show exactly how you got to 493.71? Can you write it out? Thank you.

[Na-icnr]

Hello, if i am told the business has a daily demand of 35 and that they operate or work for 252 days out of the year wha is the total demand for the year?

[justinjayanand]

Hello, I have given a homework by my lecturer.


This is the question:


The Speedy Grocery Store Carries a particular brand of coffee that has the following
characteristic:

Sales= 10 cases per week
Ordering cost=10 per order
Carrying cost = 30% per year
Item cost = 80 per case

a. How many cases should be ordered at a time?

b. How often will coffee be ordered?

c. What is the annual cost of ordering and carrying coffee?


What is the formula for this question? Can I know the formula?

[owlyyyy]

4:40 I think u meant the ordering cost s equals 30$, and not "the holding cost" .

[JosephDunno-cl]

Clark Brian Williams Paul White Thomas

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