Cindy's Toys has an average inventory of 1,800 teething rings. The carrying cost per unit per year is 5'. Cindy places an order for 3,600 teething rings on the first of each month and the order cost is $25. What are the total restocking costs using the EOQ?
A) $45
B) $90
C) $164
D) $300
E) $390

Question

Quizplus · Accepted Answer

The EOQ is 1,800 units. The total restocking costs are the order cost times the number of orders per year, which is 12 orders per year. So, the total restocking costs are $25 x 12 = $300.

Cindy's Toys Has an Average Inventory of 1,800 Teething Rings