Chapters 11 and 12 - due before 11:59 pm on Sunday November 19th 00:00 Time Left

Question

Chapters 11 and 12 - due before 11:59 pm on Sunday November 19th 00:00 Time Left:1:33:30 Arif Balhareth: Attempt 1 Question 5 (2.5 points) The campus bookstore sells 4,000 sets of graduation regalia each year. Placing an order from their supplier costs $25 regardless of order quantity, so they usually place a large order (a half years supply) at a time. It costs $5 per year to hold a cap and gown in inventory, primarily insurance costs for the highly flammable material. What is their optimal order quantity? A) 1,000 B) 150 C) 2.000 e D) 200 5a Question 6 ias pointsE

Explanation / Answer

Q. Annual demand A: 4000 units

      Ordering Cost ( Co):     $25/ order.

      Carrying Cost (CI) :     $5

        So, EOQ ( Q )= 2 *A*Co CI

          = 2*4000* 25 5

          =   40000

So, optimum order quantity        =   200 units

Ans. (D)

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