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shusha [124]
3 years ago
8

The Mickey and Mouse Cat Food Factory runs an aggressive marketing campaign and much to the​ delight, orders surge to twice thei

r previous level. If their operations manager uses an EOQ​ policy, what is the impact on the order​ quantity?
Business
1 answer:
anyanavicka [17]3 years ago
5 0

Answer:

A) The order quantity will be 40% higher.

Explanation:

the economic order quantity (EOQ) is the order quantity that should minimize total inventory costs which include both order costs and carrying inventory costs.

the formula for calculating EOQ is:

EOQ =  √(2DS  / H)

  • D = annual demand in units
  • S = order cost per purchase order
  • H = holding cost per unit per year

If D doubled, that means that EOQ will increase by 41% = √2 - 1 = 0.41 or 41% ≈ 40%

​  

​

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Most of us have similar values, but we might put them in vastly different orders of importance.
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ioda

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4 years ago
Read 2 more answers
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