Question

Joe​ Henry's machine shop uses 2 comma 480 brackets during the course of a year. These brackets are purchased from a supplier 90 miles away. The following information is known about the​ brackets: Annual demand 2 comma 480 Holding cost per bracket per year $ 1.55 Order cost per order $ 18.25 Lead time 2 days Working days per year 250 ​a) What is the​ EOQ? nothing units ​(round your response to two decimal​ places).

Answer 1

Answer:

The EOQ is 242 units

Explanation:

Economic Order Quantity: The Economic order quantity is that quantity which is to be produced by minimizing the ordering cost and the carrying cost

The computation of the economic order quantity is calculated by applying the formula which is shown below:

= $\sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost per order}}{\text{Holding cost per bracket}}}$

= $\sqrt{\frac{2\times \text{2,480}\times \text{\ 18.25}}{\text{\ 1.55}}}$

= $242 units

The Economic order quantity should always be expressed in units.

The other items which are mentioned are irrelevant. Hence, ignored.