How to calculate economic order quantity formula with a calculator
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Well there are online software which provides you to calculate the economy order....
Economic order quantity = square root of [(2 x demand x ordering costs) ÷ carrying costs]
EXAMPLE:
Economic order quantity = square root of [(2 x 1,200 x ($50)) ÷ $3]
Economic order quantity = square root of [$120,000 ÷ $3]
Economic order quantity = square root of 40,000
Economic order quantity = 200
You just determined that the ideal order level is 200 units. At that level, you minimize ordering and carrying costs
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