Figure 20 -2
Walrus Company has the following information available concerning one of its inventory items:

-Refer to Figure 20-2. The economic order quantity for this item is
A) 1,500 units.
B) 364 units.
C) 140 units.
D) 725 units.

Question

Figure 20 -2
Walrus Company has the following information available concerning one of its inventory items:
 
-Refer to Figure 20-2. The economic order quantity for this item is
A) 1,500 units. 
B) 364 units. 
C) 140 units. 
D) 725 units.

Quizplus · Accepted Answer

The economic order quantity (EOQ) formula is the square root of (2DS/H), where D=annual demand, S=ordering cost, and H=holding cost per unit. Plugging in the given values, we get EOQ=sqrt((2*8,000*20)/4)=363.96, which rounds up to 364 units.

Figure 20 -2 Walrus Company Has the Following Information Available Concerning One of Concerning