Braebner Corp. orders 500,000 microchips per year at an average cost of $130. The carrying cost of each chip is $25, and each order costs $150. Compute Braebner's EOQ.

A) 23,846
B) 2,449
C) 17,333
D) 3,005

Question

mason short · Accepted Answer

Final Answer : B, Explanation :   The Economic Order Quantity (EOQ) is calculated using the formula:   E O Q = 2 D S H EOQ = \sqrt{\frac{2DS}{H}} EOQ = H 2 D S ​ ​  , where   D D D   is the demand (500,000 microchips),   S S S   is the ordering cost ($150), and   H H H   is the holding cost per unit ($25). Plugging in the values:   E O Q = 2 ∗ 500 , 000 ∗ 150 25 = 60 , 000 , 000 = 2 , 449 EOQ = \sqrt{\frac{2*500,000*150}{25}} = \sqrt{60,000,000} = 2,449 EOQ = 25 2 ∗ 500 , 000 ∗ 150 ​ ​ = 60 , 000 , 000 ​ = 2 , 449  .

Braebner Corp. orders 500,000 microchips per year at an average cost of $130. The carrying cost of each chip is $25, and each order costs $150. Compute Braebner's EOQ.

A) 23,846
B) 2,449
C) 17,333
D) 3,005

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Braebner Corp. orders 500,000 microchips per year at an average cost of $130. The carrying cost of each chip is $25, and each order costs $150. Compute Braebner's EOQ.A) 23,846B) 2,449C) 17,333D) 3,005

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Related questions

Braebner Corp. orders 500,000 microchips per year at an average cost of $130. The carrying cost of each chip is $25, and each order costs $150. Compute Braebner's EOQ.

A) 23,846
B) 2,449
C) 17,333
D) 3,005