Answer is: 500
Here,
Monthly demand = 1000 gallons
Annual Demand (D) = 12000 gallons
Ordering Cost (S) = $100
Holding Cost (H) = $1.5 per gallon per year
EOQ = √(2*D*S/H)
= √(2*12000*100/1.5)
= 1264.911
= 1265
But we have a capacity to store 500 gallons
Hence order quantity should be 500 gallons
*** If he has unlimited count of 500 gallons tanks, then the order size (answer) will be 1500 gallons)
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3 points (tra Credit Farmer jo buy for his farm from the local cooper 1.000 gallons...
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