Homework Answers
Economic order quantity
= square root ( 2 x Annual demand x Order quantity / annual unit holding cost )
= square root ( 2 x 10000 x 1000/5 )
= 2000
Number of orders each year = annual demand / Economic order quantity = 10000/2000 = 5
Answer : Economic order quantity = 2000, 5 orders are required next year
Therefore correct choice will be “c ) Both a and b”
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