Question

Calculate the EOQ for the following items based on the information given.
	Annual Demand	Annual Holding Cost (per unit)	Order Cost
Item #1	30000	$0.75	$25.00
Item #2	15000	$3.15	$30.00
Item #3	55000	$2.50	$20.00
Item #4	80000	$2.00	$40.00
EOQ
Item #1
Item #2
Item #3
Item #4

Answer 1

Item#1) Annual Demand	30,000.00
Ordering costs	25.00
Carrying costs	0.75
EOQ = Underroot(2*A*O)/C
EOQ = Underroot(2*30000*25)/0.75
EOQ = Underroot(1500000/0.75)
EOQ = Underroot(2000000)
EOQ = 1414.21 Units
Item#2) Annual Demand	15,000.00
Ordering costs	30.00
Carrying costs	3.15
EOQ = Underroot(2*A*O)/C
EOQ = Underroot(2*15000*30)/3.15
EOQ = Underroot(900000/3.15)
EOQ = Underroot(285714.29)
EOQ = 534.52 Units
Item#3) Annual Demand	55,000.00
Ordering costs	20.00
Carrying costs	2.50
EOQ = Underroot(2*A*O)/C
EOQ = Underroot(2*55000*20)/2.5
EOQ = Underroot(1100000/2.50)
EOQ = Underroot(440000)
EOQ = 663.32 Units
Item#4) Annual Demand	80,000.00
Ordering costs	40.00
Carrying costs	2.00
EOQ = Underroot(2*A*O)/C
EOQ = Underroot(2*80000*40)/2
EOQ = Underroot(6400000/2)
EOQ = Underroot(3200000)
EOQ = 1788.85 Units