Question

How is Economic order quantity determined

Answer 1

Answer:

EOQ is the acronym for economic order quantity. ... The formula to calculate the economic order quantity (EOQ) is the square root of [(2 times the annual demand in units times the incremental cost to process an order) divided by (the incremental annual cost to carry one unit in inventory)].

Answer 2

Answer:

$We can calculate the order quantity as follows: Multiply total units by the fixedordering costs (3,500 × 15) and get 52,500; multiply that number by 2 and get 105,000. Divide that number by the holding cost ( 3) and get 35,000. Take the square root of that and get 187. That number is then Q.$

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