What is the average inventory held during the year?

Business & Finance
Tutor: None Selected Time limit: 1 Day

Cheeseburger and Taco Company purchases 8,876 boxes of cheese each year. It costs $13 to place and ship each order and $9.26 per year for each box held as inventory. The company is using Economic Order Quantity model in placing the orders. What is the average inventory held during the year?

Oct 6th, 2015

Thank you for the opportunity to help you with your question!

EOQ = [2 x 8,876 x $13/$9.26]^1/2

EOQ =[$230776/$9.26]^1/2

EOQ =[24921.81]^1/2

EOQ = 158 boxes

Average inventory held =[(0+158)/2]

average inventory held = 79 boxes

Note. All answer are whole complete number.

I hope, it will clear every thing to you .


Please let me know if you need any clarification. I'm always happy to answer your questions.
Oct 6th, 2015

This is very helpful. Thank you for showing all your calculations.  

Oct 6th, 2015

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