Alex's Sporting Goods is the only official supplier of soccer balls for games and practices at all levels of play in the Northwest region.It expects to sell 150,000 soccer balls this year.If carrying costs are $1.50 per soccer ball per year and ordering costs are $93 per order,what is the firm's EOQ for this product? (Please round your answer to the nearest whole number of balls. )
A)70 balls
B)4,313 balls
C)18,600 balls
D)There is not enough information to answer this question

Question

Quizplus · Accepted Answer

The Economic Order Quantity (EOQ) formula is used to determine the optimal order quantity that minimizes total inventory costs. The formula is EOQ = sqrt((2DS)/H), where D is demand (150,000 balls), S is ordering cost ($93), and H is carrying cost ($1.50). Plugging in the values, EOQ = sqrt((2*150,000*93)/1.5) = 4,313 balls.

Alex's Sporting Goods Is the Only Official Supplier of Soccer