Question

40 Questions and 3 hours to complete. Question 1 1 pts Sarah's Computer City sells 5,000 boxes of CD-RW compact discs per year. She determined that she pays $50 to process an order for discs. Her purchase price is $6 for each box of discs and she has determined that storage costs for one year are 25 percent of the purchase price. What is her approximate economic order quantity? 289 boxes 409 boxes O 577 boxes 2,890 boxes 5,770 boxes Next

Answer 1

Formula for eoq = (2A0/C)^1/2

Where A is annual demand = 5000

O is ordering cost = 50(per order)

C is carrying cost = 6×25% = 1.5(per unit)

Eoq = (2×5000×50/1.5)^1/2 = 577 boxes