question archive Davis Supply maintains an average inventory of 2,000 dinosaur skulls for sale to filmmakers
Davis Supply maintains an average inventory of 2,000 dinosaur skulls for sale to filmmakers
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Davis Supply maintains an average inventory of 2,000 dinosaur skulls for sale to filmmakers. The carrying cost per skull per year is estimated to be $150.00 and the fixed order cost is $55. What is the economic order quantity (EOQ)? (Round to the nearest whole number.)
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EOQ = Square root of [(2 x Annual Demand x Ordering cost) / Carrying cost]
EOQ = Square root of [(2 x 2,000 x 55) / 150]
EOQ = Square root of [220,000 / 150]
EOQ = Square root of [1,466.667]
EOQ = 38
