Answer:
Annual demand (D) = 2,400 sets
Holding cost (H) = $4
Ordering cost (Co) = $5
EOQ = √2 x 2,400 x $5
$4
EOQ = 77 units
Explanation:
Economic order quantity(EOQ) is the square root of 2 multiplied by annual demand and ordering cost per order divided by the holding cost per item per annum. EOQ is the quantity of stock that is bought each time a replenishment order is placed.