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Davis Supply maintains an average inventory of 2,000 dinosaur skulls for sale to filmmakers. The carrying cost per skull per year is estimated to be $150.00 and the fixed order cost is $44. What is the economic order quantity (EOQ)? (Round to the nearest whole number.)

Respuesta :

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Answer:

34

Explanation:

Given that:

The annual average inventory requirement = 2000

The carrying cost per order per annum = 150

The fixed cost per order = 44

Thus, the Economic ordering quantity can be calculated by using the formula;

[tex]Economic \ Order \ Quantity (EOQ)=\sqrt{\dfrac{2 \times Annual \ Demand \times Cost \ Per \ order}{ Annual \ holding \ cost \ per \ unit}[/tex]

[tex]Economic \ Order \ Quantity (EOQ)=\sqrt{\dfrac{2 \times 2000 \times 44}{ 150}[/tex]

[tex]Economic \ Order \ Quantity (EOQ)=\sqrt{\dfrac{176000}{ 150}[/tex]

[tex]Economic \ Order \ Quantity (EOQ)=\sqrt{1173.33333}[/tex]

Economic   Order   Quantity (EOQ) = 34.25

Economic   Order   Quantity (EOQ) ≅ 34 to the nearest whole number.

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