Final answer:
The cost of holding the stock under the EOQ policy is $27,000. The cost of holding stock under the EOQ policy, with an EOQ of 1,800 units and a carrying cost of $30.00 per unit, is $54,000 per year. This is calculated by multiplying the EOQ by the carrying cost per unit.
Step-by-step explanation:
The cost of holding the stock under the economic order quantity (EOQ) policy can be calculated using the formula:
Cost of holding stock = (EOQ / 2) x Carrying cost per unit per annum
Given that the EOQ is 1,800 units and the carrying cost per unit per annum is $30.00, we can substitute the values into the formula:
Cost of holding stock = (1,800 / 2) x $30.00 = $27,000
Therefore, the cost of holding the stock under the EOQ policy is $27,000.
The cost of holding stock under the EOQ policy, with an EOQ of 1,800 units and a carrying cost of $30.00 per unit, is $54,000 per year. This is calculated by multiplying the EOQ by the carrying cost per unit.
The cost of holding stock under the Economic Order Quantity (EOQ) policy can be calculated by multiplying the EOQ by the carrying cost per unit. Given an EOQ of 1,800 units and a carrying cost of $30.00 per unit per annum, the total holding cost is $54,000 per year. This calculation is an essential aspect of inventory management, allowing businesses to minimize total costs associated with inventory, including holding and ordering costs.
The Economic Order Quantity (EOQ) is a widely used inventory management formula that aims to minimize the total holding costs and ordering costs for a particular product. In this scenario, where the EOQ is determined to be 1,800 units and the carrying cost per unit per annum is $30.00, we can calculate the total holding cost under the EOQ policy.
The holding cost, also known as carrying cost, is the cost of holding inventory over a specific period. The EOQ formula incorporates the square root of [(2 * Demand * Ordering Cost) / Carrying Cost per Unit], where Demand represents the total demand for the product, Ordering Cost is the cost of placing an order, and Carrying Cost is the cost of holding one unit in inventory for a year.
In this case, since the EOQ is given as 1,800 units and the carrying cost per unit per annum is $30.00, the total holding cost can be calculated by multiplying the EOQ by the carrying cost per unit. Therefore, the cost of holding the stock under the EOQ policy would be 1,800 units * $30.00, resulting in a total holding cost of $54,000.00 per annum. This cost represents the expense incurred to maintain the inventory at the optimal level determined by the EOQ, striking a balance between holding and ordering costs.