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    Question

    Consider the following information.

    src="https://www.ixambee.com/questionimage/Chapter/1690527927-31.JPG" alt="" /> What will be the Economic Ordering Quantity (EOQ)?
    A 225 units Correct Answer Incorrect Answer
    B 242 units Correct Answer Incorrect Answer
    C 252 units Correct Answer Incorrect Answer
    D 258 units Correct Answer Incorrect Answer

    Solution

    A-2400(Annual Demand) B-4.00(Ordering Cost per order) C-2.40├Ч12%=0.288(Carrying Cost per order) According to the formula, EOQ=тИЪ2AB/C Putting the values, EOQ=тИЪ2├Ч2400├Ч4/0.288 =тИЪ80000 =258.1 units or 258 units. Therefore, EOQ is 258 units.

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