If annual demand is 12,000 units, annual holding cost is $15 per unit, and setup cost per order is $25, which of the following is the EOQ lot size?

Annual demand (D) = 12,000 units

Ordering cost (Co) = $25

Holding cost (H) = $15

EOQ = 2DCo/H

EOQ = √ 2 x 12,000 x $25

15

EOQ = 200 units

Explanation:

EOQ is equal to the square root of 2 multiplied by annual demand and ordering cost divided by holding cost.