2L1S Company orders 250 units at a time and places 15 orders per year.Total ordering cost is $1,100,and total carrying cost is $1,750.What is the economic order quantity?
A)The economic order quantity (EOQ) is 250.
B)The economic order quantity (EOQ) is more than 250.
C)The economic order quantity (EOQ) is less than 250.
D)The economic order quantity (EOQ) is 15.

Question

Quizplus · Accepted Answer

The EOQ is less than 250 because the current order quantity results in higher total costs than necessary, as indicated by the separate ordering and carrying costs.

2L1S Company Orders 250 Units at a Time and Places