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aliya0001 [1]
3 years ago
9

A company produces item Y, and uses the basic EOQ model for managing its inventory. Demand is 200 per month. The ordering cost i

s $20, and carrying cost is $10 per unit per month Determine the order quantity for product Y 1) 800 0 2120 3) 28.28 4) 14.14
Mathematics
1 answer:
vodka [1.7K]3 years ago
8 0

Answer:

3) 28.28.

Step-by-step explanation:

In order to find the answer we need to establish the EOQ equation which is:

EOQ=\sqrt{2*s*d/h} where:

s=the cost of the setup

d=demand rate

h=cost of holding

Because demand is 200/month so d=200,

the ordering cost is $20/month  so s=20, and

the carrying cost in $10/month so h=10.

Using the equation we have:

EOQ=\sqrt{2*20*200/10}

EOQ=\sqrt{800}

EOQ=28.28

So, answer to 'the order quantity for product' is 3) 28.28.

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