Answer:
Annual demand(D) = 1,210
Ordering cost(S) = $26
Annual holding cost (H) = $24
With the order quantity(Q) = 25,
Total cost = Holding cost + ordering cost
= [(Q/2)H] + [(D/Q)S]
= [(25/2)24] + [(1210/25)26]
= $300 + $1258.4
= $1558.4
With the order quantity(Q) = 40,
Total cost = Holding cost + ordering cost
= [(Q/2)H] + [(D/Q)S]
= [(40/2)24] + [(1210/40)26]
= $480 + $786.5
= $1266.5
With the order quantity(Q) = 50,
Total cost = Holding cost + ordering cost
= [(Q/2)H] + [(D/Q)S]
= [(50/2)24] + [(1210/50)26]
= $600 + $605
= $1205
With the order quantity(Q) = 60,
Total cost = Holding cost + ordering cost
= [(Q/2)H] + [(D/Q)S]
= [(60/2)24] + [(1210/60)26]
= $720 + $524.33
= $1244.33
With the order quantity(Q) = 100,
Total cost = Holding cost + ordering cost
= [(Q/2)H] + [(D/Q)S]
= [(100/2)24] + [(1210/100)26]
= $1200 + $314.6
= $1514.6
