Question

Ray's Satellite Emporium wishes to determine the best order size for its best-selling satellite dish (model TS111). Ray has estimated the annual demand for this model at 850 units. His cost to carry one unit is $65 per year per unit, and he has estimated that each order costs $14 to place.

Answer 1

economic order quantity = 19 units

Step-by-step explanation:

given data

Annual Demand = 850 units

Cost of carrying = $65 per unit

Ordering Cost = $14

solution

we get here economic order quantity that is

economic order quantity =
`\sqrt{(2 * Annual Demand *Ordering Cost)/( Cost of carrying)}` .....................1

put here value we get

economic order quantity =
`\sqrt{(2*850*14)/(65)}`

economic order quantity = 19.13514

economic order quantity = 19 units