Jim has part ownership in a house. He has decided to sell his interest. He signs an agreement with a local real estate designate
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Answer: A) The Economic Order Quantity is 601 units.
B)The Economic Order Quantity is 425 units.
C )The Economic Order Quantity is 849 units
Explanation:
EOQ, economic order quantity =
where D= demand
S = Order cost
H= holding cost.
a)when D = 8,200 per month, S = $44 per order, and H = $2.00
EOQ, economic order quantity =
= =
= 600.666= 601 units
b) if the holding cost doubles, holding cost = HX 2 = 2 X 2 = 4
EOQ, economic order quantity =
= =
= 424.73 = 425units
C) if the holding cost drops in half, holding cost = H/2 = 2 X 1/2 = 1
EOQ, economic order quantity =
= =
= 849.47 = 849units