A company that embroiders T-shirts,baseball caps,and backpacks uses 15,000 plain T-shirts annually. The optimal order quantity is 500 shirts. The company embroiders about 150 shirts daily. Which calculations would indicate that the company should place an order approximately every three days?
A)materials requirement planning
B)just-in-time inventory management
C)break-even
D)economic order quantity

Question

A company that embroiders T-shirts,baseball caps,and backpacks uses 15,000 plain T-shirts annually. The optimal order quantity is 500 shirts. The company embroiders about 150 shirts daily. Which calculations would indicate that the company should place an order approximately every three days?
A)materials requirement planning  
B)just-in-time inventory management  
C)break-even  
D)economic order quantity

Quizplus · Accepted Answer

The economic order quantity (EOQ) model helps determine the optimal order quantity that minimizes total inventory costs. Given the annual demand of 15,000 shirts and an optimal order quantity of 500 shirts, the company would place an order every 500/150 = 3.33 days, which is approximately every three days.

A Company That Embroiders T-Shirts,baseball Caps,and Backpacks Uses 15,000 Plain