Question

You have a product that has annual demand of 2700 , order costs of 150 , and annual holding costs of 12. You want to use the EOQ approach. How many orders will you place per year? Answer to one decimal point.

Answer 1

To find the number of orders placed per year using the EOQ approach, substitute the given values into the EOQ formula, resulting in approximately 260 orders.

Step-by-step explanation:

To find the number of orders that will be placed per year using the Economic Order Quantity (EOQ) approach, we can use the following formula:

EOQ = √((2 * order cost * demand)/(holding cost))

Given that the annual demand is 2700, the order cost is 150, and the annual holding cost is 12, we can substitute these values into the formula:

EOQ = √((2 * 150 * 2700)/(12)) = √(810000/12) = √67500 = 260.0

Therefore, the number of orders placed per year will be approximately 260.