Smoother part processing. He also shares his justification process for the new purchase. According to this formula, no other machine could offer the low EOQ that the Integrex could. Average cost per order.
Demand includes the average forcasted usage per month.
Forcasted unit sales is 250 units per month. Examples of holding costs can be the cost of money or the cost of space inventory takes up in a warehouse. This cost is representative of the price each piece costs to be held on the shelf. Fi nding an EOQ of 383 detemines that it would be ideal to run this many parts. If more than 383 parts are run the reverse is true.