Question

Vision Company sells optical equipment. Blitz Company manufactures special glass lenses. Vision orders 11 comma 700 lenses per​ year, 280 per​ week, at $ 38.00 per lens. Blitz covers all shipping costs. Vision earns 16​% on its cash investments. The purchaseminusorder lead time is 4 weeks. Vision sells 225 lenses per week. The following data are​ available: Relevant ordering costs per purchase order $ 44.25 Relevant​ insurance, materials​ handling, breakage, and so​ on, per year $ 9.50 What is the economic order quantity for​ Vision?

Answer 1

330 units

Step-by-step explanation:

The ask to find the economic order quantity

To solve this, we need to know the formula for economic order quantity, which we have as;

Economic order quantity =√(2SD÷H)

Where we have S as ordering cost S = $44.25

And D as Annual Demand = 11,700 Units

H as Holding cost which is H = $9.5

Using the Economy order quantity, we have

Economic order quantity = √(2SD/H)

Substituting the values, we hsv

Economic order quantity to be = =√(2× 44.25 × 11,700× 9.5 )

=√(1,035,450/9.5)

=√108994.74

=330.15

Thereforez the Economic order quantity will be

Economic order quantity = 330 units

Answer 2

330 units are the economic order quantity

Step-by-step explanation:

Here

Annual Demand = D = 11,700 Units

Ordering cost per purchase order = S = $44.25

Holding cost = H = $9.5

Economic order quantity = √(2SD/H)

Economic order quantity = √(2* $44.25 * 11,700 units/ $9.5 per unit per year)

Economic order quantity = 330 units