A manufacturer buys cardboard boxes from a supplier. The annual demand is 36,000 boxes and is uniformly distributed The boxes cost $4 each.
The estimated order cost is $6, and the carrying cost rate is 30% per year What are the EOQ, and the annual order and carrying cost?
How many times a year are orders placed, and what is the average time, in weeks, between orders? Using the answer from
, if you round the average time between orders to the nearest week, what should the order quantity be?
Would you recommend using this order quantity and time interval?