| P301 - Problem 9 |
| A large food distributor uses 8000 packing crates each month to pack and ship its goods. The crates are purchased at a cost of $10 each. The annual holding cost for a crate is estimated at 35% of the purchase price. It is estimated that the cost to place an order for the crates is $25. What is the EOQ for this item? |
| 1) What is the EOQ for these crates? (Round your answer to the nearest whole number) |
| 2) If the company used the EOQ, what would be there total cost for ordering and holding these crates? (Round your final answer to the nearest whole number) |
| 3) If the current purchasing manager orders crates once a month, how much money would they save if they switched to the EOQ method of ordering? |
t.erins2t
hw_problem_9.xlsx
