rafeychoudhry8219 rafeychoudhry8219

06-08-2017
Business

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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?

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Aliwohaish12 Aliwohaish12

06-08-2017

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

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