# Economic Order Quantity Help

#### John321

Hello, I am struggling to calculate the economic order quantity for a homework problem using this formula,

https://wikimedia.org/api/rest_v1/media/math/render/svg/7d7c52b45e0bc4b8b9bca91916257130abc9326b

I am not sure how to calculate the h value ( holding cost), this is the information given -

Last years total storage facilities running cost was \$190,000
Cost of money invested in stock last year was \$110,000
Average total value of stock during last year was \$1,250,000

There are 5 different items i need to calculate the holding cost for, we are given the material costs of each

To calculate the h value i have done 190,000/1,250,000 = 0.152 , then just done 0.152*34 (34 is material cost for one of the items) .
I don't feel very confident that iv done this correctly but don't know how else to do it?
Thanks

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