Question

If dequals=​1,000 units per​ year, sequals=​$62.50 per​ order, and hequals=​$0.50 per unit per​ year, what is the economic order​ quantity?

Answer 1

The formula is
EOQ=√((2DS)÷H)
D annual demand 1000
S ordering or setup cost 62.5
H annual holding cost 0.5
EOQ=√((2×1,000×62.5)÷0.5)=500