Answer:
Expected number of orders=31.6 orders per year
Explanation:
The expected number of orders would be the Annual demand divided by the economic order quantity(EOQ).
The Economic Order Quantity (EOQ) is the order quantity that minimizes the balance of holding cost and ordering cost. At the EOQ, the holding cost is exactly the same as the ordering cost.
It is calculated as follows:
EOQ = (2× Co D)/Ch)^(1/2)
Co- ordering cost Ch - holding cost, D- annual demand
EOQ = (2× 10 × 100000/2)^(1/2)= 3162.27 units
Number of orders = Annual Demand/EOQ
= 100,000/3,162.27= 31.62 orders
Expected number of orders=31.6 orders per year
