Question

Ray's Satellite Emporium wishes to determine the best order size for its best-selling satellite dish (model TS111). Ray has estimated the annual demand for this model at 850 units. His cost to carry one unit is $65 per year per unit, and he has estimated that each order costs $14 to place.

Answer 1

Answer:

economic order quantity =  19 units

Explanation:

given data

Annual Demand = 850 units

Cost of carrying = $65 per unit

Ordering Cost = $14

solution

we get here economic order quantity that is  

economic order quantity = $\sqrt{\frac{2 * Annual Demand *Ordering Cost}{ Cost of carrying}}$    .....................1

put here value we get

economic order quantity = $\sqrt{\frac{2*850*14}{65}}$

economic order quantity = 19.13514

economic order quantity =  19 units