University Furniture sells 2,500 sofas a year at an average price per sofa of $1,250.The carrying cost per unit is $11.60.The company orders 80 sofas at a time and has a fixed order cost of $55 per order.The sofas are sold out before they are restocked.What is the economic order quantity?
A)154 sofas
B)172 sofas
C)181 sofas
D)198 sofas
E)211 sofas

Question

Quizplus · Accepted Answer

EOQ = √[(2 × 2,500 × $55)/$11.60] = 154 sofas

University Furniture Sells 2,500 Sofas a Year at an Average