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15 January, 15:03

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?

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  1. 15 January, 15:12
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    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.
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Home » Business » 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?
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