Engineering Board Exam Reviewer · Engineering Management · hard
Annual demand is 4800 units, ordering cost is ₱300 per order, unit cost is ₱80 and the annual carrying cost rate is 25% of unit cost. What is the EOQ?
- 190 units
- 3394 units
- 379 units
- 268 units
Answer
C. 379 units
Solution
H = 0.25(80) = ₱20/unit/yr. EOQ = sqrt(2 × 4800 × 300/20) = 379 units.
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