Given an EOQ model with shortages in which annual demand is 4200 units, C_o=$160, C_c=$7 per unit per year, and C_s=$25, what is the total annual shortage cost? A) 296.51 B) 298.53 C) 299.17 D) 285.91

Question

Quizplus · Accepted Answer

The total annual shortage cost is calculated using the formula: (C_s * D * Q*) / (2 * (Q* + S*)), where Q* is the optimal order quantity and S* is the optimal shortage quantity. After calculating Q* and S*, the total annual shortage cost is approximately $296.51.

Given an EOQ Model with Shortages in Which Annual Demand