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Sagot :
An approach employed by a business to reduce overall costs is economic order quantity to reduce production costs, this can be used to determine the ideal quantity. Using the formula 2(DS)H, where D represents the annual number of orders, S represents the cost per unit, and H represents the holding cost, one can get the ideal number of orders.
What is shipping cost?
Shipping costs are the upfront expenses incurred when delivering a product from a shelf in your store or warehouse to a customer's door. Shipping costs are the upfront expenses incurred when delivering a product from a shelf in your store or warehouse to a customer's door. These expenses may comprise, but are not limited to: Costs associated with boxes, packaging, tape, and stickers
The cost of employing a worker to pick, package, and send a package
The price of hiring a courier to pick up and deliver an item
When shipping overseas, the expense of import/export costs
Given that a business orders and utilizes 2880 boxes of office supplies, $200 for shipping each purchase, plus an additional $3 for each box of supplies, and $5 for storage fees.
each box.
The formula can be used to determine the optimal number of orders.
√2(D×S) H
We've got
S= (200+3) S=203, D=2880, and H=$5
Using the specified values in the formula above:
optimal number of orders=√2(D×S) H=√2× (2880×203)5=√1,169,2805≈483
Thus, 483 is about the optimum number of orders.
To know more about Economic quantity order, visit:
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