A downtown bookstore is trying to determine the optimal order quantity for a popular novel just...

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A downtown bookstore is trying to determine the optimal orderquantity for a popular novel just printed in paperback. The storefeels that the book will sell at four times its hardback figures.It would,therefore, sell approximately 6,000 copies in the nextyear at a price of $1.50. The store buys the book at a wholesalefigure of $1. Costs for carrying the book are estimated at $0.15 acopy per year, and it costs $25 to order more books.

a. Determine the EOQ.
b. What would be the total costs for ordering the books 1, 4,5, 10, and 15 times a year?
c. What questionable assumptions are being made by the EOQmodel?

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4.2 Ratings (824 Votes)

your Economic order quantity square root of 2 x demand xordering costs carrying costsDemand 6000Ordering cost 25Carrying cost 0151 EOQ is a quantity optimization model inwhich we find the optimum quantity to order by considering allvariable cost and fixed associated with orders See Answer

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A downtown bookstore is trying to determine the optimal orderquantity for a popular novel just printed in paperback. The storefeels that the book will sell at four times its hardback figures.It would,therefore, sell approximately 6,000 copies in the nextyear at a price of $1.50. The store buys the book at a wholesalefigure of $1. Costs for carrying the book are estimated at $0.15 acopy per year, and it costs $25 to order more books.a. Determine the EOQ.b. What would be the total costs for ordering the books 1, 4,5, 10, and 15 times a year?c. What questionable assumptions are being made by the EOQmodel?