Fiesta Taco Company purchases 30,000 boxes of ground beef each year. I

Fiesta Taco Company purchases 30,000 boxes of ground beef each year. It costs $50 to place each order and
$10.00 per year for each box held as inventory.

a. What is the average inventory held during the year?
b. What is the economic order quantity for the ground beef?
c. How many orders will be made each year?

ANSWER

a. Average inventory held = Q
2 =
30,000
2 = 15,000 boxes.
b. Q* = 20S
C =
2. (