Question
Asked Nov 17, 2019
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Demand for an item is 2,750 units per year. Each order placed costs $10; the annual cost to carry items in inventory is $5 each. In what quantities should the item be ordered? (Round your answer to the nearest whole number.)

Optimal order quantity:   Units

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Expert Answer

Step 1

Given information:

Annual demand (D) = 2,750 units per year

Order cost (S) = $10 per order

Carrying cost (H) = $5 per unit per year

Step 2

Calculation of optimal order quantity...

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2* DxS н ЕOQ- 2x2,750x10 55,000 5 11,000 -104.88 105 units

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