Answer to Question #189190 in Management for Andrew-John Bock

Question

Question 5 (Economic Order Quantity)

Ndapandula Investment CC sells about 12 000 bags of poulty grain per year. The Holding costs are N$ 50.00 per bag per year, and the Ordering costs are about N$ 100.00 per order. The Investment company operates 280 days per year.

Answer 1

EOQ=√2DS/H

=√2 x 12000 x 100/50

=√48000

=219.089 units