# Inventory Model

• Feb 25th 2008, 11:24 AM
DooBeeDoo
Inventory Model
assuming no shortages permitted and an order lead time of zero, calculate the economic order quantity and economic order time for the firm:

if:
x(demand) = 1000 units/month
h (holding cost) = 1% of the value of stock/month
k(fixed cost)=$180/delivery c (variable cost) =$4/unit

the economic order quantity is (2kx/h) square rooted.

any help appreciated!
• Feb 25th 2008, 12:13 PM
colby2152
Quote:

Originally Posted by DooBeeDoo
assuming no shortages permitted and an order lead time of zero, calculate the economic order quantity and economic order time for the firm:

if:
x(demand) = 1000 units/month
h (holding cost) = 1% of the value of stock/month
k(fixed cost)=$180/delivery c (variable cost) =$4/unit

the economic order quantity is (2kx/h) square rooted.

any help appreciated!

$\displaystyle EOQ=\sqrt{\frac{2kx}{h}}\Rightarrow \sqrt{\frac{2*180*1000}{0.1}} = ???$

I will leave you and your calculate to complete the problem.