Final answer:
The Economic Order Quantity (EOQ) for Meridian is approximately 7,071 bottles. The EOQ for Meridian Natural Taste can be calculated using the EOQ formula with the given demand, order cost, and carrying cost per unit per year to find the optimal order quantity that minimizes inventory costs.
Step-by-step explanation:
The Economic Order Quantity (EOQ) can be calculated using the following formula:
EOQ = sqrt((2 * Order cost * Annual demand) / Carrying cost)
Given that Meridian orders 250,000 bottles per year, the carrying cost is GHS 0.45 per bottle per year, and the order cost is GHS 750 per order, we can substitute these values into the formula to calculate the EOQ:
EOQ = sqrt((2 * 750 * 250,000) / 0.45) = 7,071.07
Therefore, the EOQ for Meridian Natural Taste is approximately 7,071 bottles.
The EOQ for Meridian Natural Taste can be calculated using the EOQ formula with the given demand, order cost, and carrying cost per unit per year to find the optimal order quantity that minimizes inventory costs.
The student's question refers to the calculation of the Economic Order Quantity (EOQ) for Meridian Natural Taste, a company that orders 250,000 standard bottles of pineapple and ginger mix fruit juice per year. To calculate the EOQ, we would typically apply the EOQ formula: EOQ = √((2DS)/H), where D is the demand (number of units ordered per year), S is the order cost per order, and H is the carrying cost per unit per year. In this case, D is 250,000 bottles, S is GHS 750, and H is GHS 0.45.
Plugging these values into the formula gives us: EOQ = √((2 * 250,000 * 750) / 0.45) which will provide us with the EOQ value in terms of the number of bottles that Meridian should order at one time to minimize total inventory costs.