RightChain Lots | Lot Size Optimization

Economic Order Quantity with Discount = [ (2 x POC x FAD) / (ICR x (1- d ) x UIV) ] 1/2 d = discount rate Example If the purchase order cost for an item is $300; its forecast annual demand is 1,000 units per year; its inventory carrying rate is 35% per year; its unit inventory value is $6,000; and the discount rate is 15%; what is the EOQ and what is the EOQ with the discount rate? EOQ = 16.9 EOQD = 18.3

EOQ WITH QUANTITY DISCOUNTS