Microsoft Excel Data Analysis and Business Modeling (Office 2021 and Microsoft 365), 7th Edition

Chapter 86

The economic order quantity inventory model

Questions answered in this chapter:

• An electronics store sells 10,000 cell phones per year. Each time an order is placed for a supply of cell phones, the store incurs an order cost of $10. The store pays $100 for each cell phone, and the cost of holding a cell phone in inventory for a year is assumed to be $20. When the store orders cell phones, how large an order should it place?

• A computer-manufacturing plant produces 10,000 servers per year. The cost to produce each server is $2,000. The cost to set up a production run of servers is $200, and the cost to hold a server in inventory for a year is $500. The plant can produce 25,000 servers per year. When the plant produces servers, how ...