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The Wonderful Hair Salon Buys Lots of Shampoos

Question 28

Multiple Choice

The Wonderful Hair Salon buys lots of shampoos. Wonderful follows the exponential-smoothing forecasting method, and based on their forecast calculations, annual demand is 750 units. Wonderful normally pays $3.00 per shampoo bottle when ordering from its supplier. Each order that is placed with the supplier costs $18 to process. Wonderful's holding cost for shampoos is 15% of the cost of the shampoo bottle per year.
-What is the EOQ size of each order?


A) 150 units
B) 350 units
C) 200 units
D) 245 units
E) 300 units

Correct Answer:

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