Moors Manufacturing Ltd uses 5000 square metres of steel each year in its production process.Storage costs are $1 50 per square metre per year.Acquisition costs are $600 per order.What is the economic order quantity?

Name: Moors Manufacturing Ltd uses 5000 square metres of steel each year in its production process.Storage costs are $1 50 per square metre per year.Acquisition costs are $600 per order.What is the economic order quantity?
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Question

Quizplus · Accepted Answer

EOQ = √(2DS/H) = √(2*5000*$150/$600) = 2000 square metres.

Moors Manufacturing Ltd Uses 5000 Square Metres of Steel Each