Problem
Answer from operations Management standpoint.
A furniture store imports table sets to sell in local markets with an annual demand of 4000 sets. The store imports in batches of 80 units, incurring ordering cost of $200 and a carrying cost of $80/set/year.
1) What is the current total annual cost (TC) incurred by the store?
2) What is the EOQ?
3) What is the total annual cost if the store orders at the EOQ?