One company operates 300 days per year. The economic order quantity (EOQ) is 250 units. Annual demand is 5000 units.

One company operates 300 days per year. The economic order quantity (EOQ) is 250 units. Annual demand is 5000 units. The expected time between orders will be:

15 days

20 days

1.2 days

16.6 days

None of the above

Expert Solution

15 days
20 days
1.2 days
16.6 days
None of the above

Answer

To compute Expected time between orders :

Given :

Annual Demand	5000
No. of working days per year	300
EOQ (Q*)	250

So , we can compute Number of orders = Annual Demand/EOQ (Q*) = 5000/250 = 20 orders per year.
Expected time between orders = No. of working days per year / number of orders = 300/20 = 15 days.

So answer is option a) 15 days.

Excel working for reference

keosha answered 2 years ago

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