What is the economic order quantity they should use?

September 16, 2019/in Graduate Papers /by admin

3. Satriale uses 145,600 switches per year (or 2,800 per week) and currently orders 2,800 weekly (assume they are

delivered immediately). If the carrying cost per switch is $6.20 and the fixed order cost is $1,200, is the company’s inventory policy optimal? What is the economic order quantity they should use? How much money will they save by changing their ordering behavior to that quantity compared to what they are spending now?

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What is the economic order quantity they should use?

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