Cheeseburger and Taco Company purchases 5,702 boxes of cheese each year. It costs $27 to place...

Cheeseburger and Taco Company purchases 5,702 boxes of cheese each year. It costs $27 to place and ship each order and $7.18 per year for each box held as inventory. The company is using Economic Order Quantity model in placing the orders.

What is the annual ordering cost of cheese inventory.

Round the answer to two decimals.

Expert Solution

EOQ = 207 Units.

No. of Orders = Annual Demand / EOQ

No. of Orders = 5,702 / 207

No. of Orders = 27.53 = 28 Orders

Annual Ordering Cost = No. of Oders * Ordering Cost per Order

Annual Ordering Cost = 28 * $ 27

Annual Ordering Cost = $ 756.

jeff jeffy answered 2 years ago

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