question archive University Furniture sells 2,500 sofas a year at an average price per sofa of $1,250
University Furniture sells 2,500 sofas a year at an average price per sofa of $1,250
Subject:FinancePrice:1.87 Bought7
University Furniture sells 2,500 sofas a year at an average price per sofa of $1,250. The carrying cost per unit is $11.60. The company orders 80 sofas at a time and has a fixed order cost of $55 per order. The sofas are sold out before they are restocked. What is the economic order quantity?
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Answer:
Economic order quantity =( 2*2500*55/11.60)^(1/2)
Economic order quantity = 153.97 or 154 Units
