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QUESTION 3 A certain type of computer costs $ 827 and the annual holding cost is 25% of the value of the item. Annual demand
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Answer #1

Annual Demand D = 10000 units

Unit Cost P = 827

Holding Cost H = 827*25% = 206.75

Order Cost S = 114

Optimal Order Quantity will be equal to EOQ.

EOQ = (2DS/H)^(1/2)

EOQ = (2*10000*114/206.75)^(1/2)

EOQ = 105.01 units

EOQ = 105 units

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