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Moura uses the economic order quantity formula (EOQ) to establish its optimal
reorder quantity for its single raw material. The following data relates to the stock
costs:
Purchase price: $15 per item
Carriage costs: $50 per order
Ordering costs: $5 per order
Storage costs: 10% of purchase price plus $0·20 per unit per annum
Annual demand is 4,000 units.What is the EOQ to the nearest whole unit?
A 153 units
B 170 units
C 485 units
D 509 units.There is no point in simply typing out a full question and expecting to be provided with a full answer. You must have an answer in the same book in which you found the question, so ask about whatever it is in the answer that you are not clear about and then I will explain.
(If you do not have an answer for some reason then type out your own answer and I will tell you whether or not you are correct. Everything needed to answer this question is explained in my free lectures. The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.)
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