Engineering Board Exam Reviewer · Engineering Management · medium
Annual demand is 12,000 units, ordering cost is ₱500 per order and holding cost is ₱30 per unit per year. What is the economic order quantity?
- 447 units
- 400000 units
- 632 units
- 38 units
Answer
C. 632 units
Solution
EOQ = sqrt(2DS/H) = 2 × 12,000 × 500/30 = 632 units.
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