It costs View Your World, a high- end window manufacturer, $30 for each order of windows they place. View Your World sells 3,000 windows a year and each window that is held in inventory costs $200 per year. What is the economic order quantity?
A)38
B)22
C)30
D)10

Question

Quizplus · Accepted Answer

The economic order quantity formula is √((2DS)/H), where D is the demand, S is the ordering cost, and H is the holding cost. Plugging in the values, we get √((2 x 3000 x $30)/$200) = 30. Therefore, the economic order quantity is 30. Option C is the correct answer.

All other choices are incorrect as they either do not match the calculated value or are not supported by the given information.

It Costs View Your World, a High- End Window Manufacturer