Question

Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 14 comma 300 units. Southeastern estimates its annual holding cost for this item to be ​$26 per unit. The cost to place and process an order from the supplier is ​$72. The company operates 300 days per​ year, and the lead time to receive an order from the supplier is 3 working days. ​a) What is the economic order​ quantity? nothing units ​(round your response to the nearest whole​ number).

Answer 1

281 units.

Step-by-step explanation:

`Economic Order Quantity = \sqrt{(2SD)/(H) }`

D = Annual Demand = 14,300 units

S = Cost per order = $72

H = Holding Cost = $26

`Economic Order Quantity = \sqrt{(2 * 72 * 14300)/(26) }`

`Economic Order Quantity = √(79200)`

Economic Order Quantity = 281.42