Optimal Order Quantity = square root of (2DS/H)
D is demand = 10,000 units
S or setup cost = $114
H or holding cost = 25% of 827 =$ 206.75
Optimal order quantity = sqrt (2×10,000×114/206.75) = 105.01 ~ 105 units
3 points A certain type of computer costs 5 827 and the annual holding cost is...
QUESTION 3 A certain type of computer costs $ 827 and the annual holding cost is 25% of the value of the item. Annual demand is 10,000 units, and the order cost is $114 per order. What is the optimal order quantity? Product cost $ 827 per unit holding cost at % of price 25% Annual Demand 10,000 units per year order cost $114 per order Excel Access
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