A company that embroiders t-shirts, uses 15,000 plain t-shirts annually. The optimal order quantity is 500 shirts. The company embroiders approximately 150 shirts daily. Using the ____ calculations, the company knows it should place an order approximately every 3 days.
A)materials requirement planning
B)just-in-time inventory management
C)break-even
D)economic order quantity
E)independent demand

Question

Quizplus · Accepted Answer

The economic order quantity (EOQ) model helps determine the optimal order quantity that minimizes total inventory costs. Given the daily embroidery rate and annual usage, the EOQ model indicates ordering every 3 days to maintain optimal inventory levels.

A Company That Embroiders T-Shirts, Uses 15,000 Plain T-Shirts Annually