Question

If D​ = 8 comma 300 per​ month, S​ = ​$47 per​ order, and H​ = ​$2.00 per unit per​ month

​a) What is the economic order​ quantity? The EOQ is 625 units ​(round your response to the nearest whole​ number).
​b) How does your answer change if the holding cost​ doubles? The EOQ is nothing units ​(round your response to the nearest whole​ number
c) What if the holding cost drops in half?

Answer 1

(a) 625 units (Approx)

(b) 442 units (Approx)

(c) 883 units (Approx)

Step-by-step explanation:

(a) Economic Order quantity:

`=\sqrt{(2* Demand* Ordering\ Cost)/(Holding\ cost) }`

`=\sqrt{(2* 8,300* 47)/(2) }`

= 625 units (Approx)

(b) Economic Order quantity:

`=\sqrt{(2* Demand* Ordering\ Cost)/(Holding\ cost) }`

`=\sqrt{(2* 8,300* 47)/(4) }`

= 442 units (Approx)

(c) Economic Order quantity:

`=\sqrt{(2* Demand* Ordering\ Cost)/(Holding\ cost) }`

`=\sqrt{(2* 8,300* 47)/(1) }`

= 883 units (Approx)