Sydney Surfboards sells 12 000 surfboards a year at an average price per carpet of $499.The carrying cost per unit is $25 and the fixed order costs are $75.What is the economic order quantity assuming there is no safety stock.

Question

Quizplus · Accepted Answer

The Economic Order Quantity (EOQ) is calculated using the formula: EOQ = sqrt((2DS)/H), where D is the demand (12,000), S is the order cost ($75), and H is the holding cost per unit ($25). Plugging in the values, EOQ = sqrt((2*12000*75)/25) = 268.

Sydney Surfboards Sells 12 000 Surfboards a Year at an Average