MGMT-6085 Inventory Distribution Management Student Name Student Number Swapnil Raj 0964466
MGMT-6085 Inventory Distribution Management Student Name Student Number Swapnil Raj 0964466
Inventory
Distribution
Management
E. The store currently uses a lot size of 700 bags (Q = 700). What would be the
annual cost saved by shifting from the 700 bag lot size to the EOQ?
= (D / Q)*S
= (6500 / 700) * 75
= $696.429
Total Cost
Annual Holding Cost + Annual ordering Cost
= $1548.05 + $696.429
= $ 2244.479
= (Q/2) * H
= (470/2) *.27 * 16.38
= $1038.3
= (D/Q) * S
= (6500/470) * 75
= $1038.3
Total Cost