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A produce distributor uses 787 packing crates a month, which it purchases at a cost of...

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General Management

A produce distributor uses 787 packing crates a month, which itpurchases at a cost of $10 each. The manager has assigned an annualcarrying cost of 36 percent of the purchase price per crate.Ordering costs are $28. Currently, the manager orders once a month.How much could the firm save annually in ordering and carryingcosts by using the EOQ? (Round intermediate calculations and finalanswer to 2 decimal places. Omit the "$" sign in yourresponse.)

Savings $______ per year

Answer & Explanation Solved by verified expert
3.9 Ratings (552 Votes)
Given values Monthly demand 787 crates Annual demand D 787 x 12 9444 crates Cost C 10 each Annual carrying cost Cc 36 of purchase price per crate 36 of 10 Annual carrying cost Cc 36 Ordering costs Co 28 Current    See Answer
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