Meena distributors has an annual demand for an airport metal detector of 14001400 units. the cost of a typical detector to meena is $400.00400.00. carrying cost is estimated to be 2020% of the unit cost, and the ordering cost is $25.0025.00 per order. if purushottama meena, the owner, orders in quantities of 300300 or more, he can get a 55% discount on the cost of the detectors. should meena take the quantity discount? what is the eoq without the discount?

The answer is EOQ = 591.61 unit.

Explanation:EoQ =

√2DS/H

Where

D= demand in unit

S = ordering cost

H= Holding Cost

Demand =1,400

× 400 = 560,000 per year

Order Cost $25

Holding Cost = 20% of unit cost

20/100× 400 = $80 per item per year

√2DS/H

√2×560,000×25/80

√28,000,000/80

=√350,000

= 591.61

EOQ = 591.61 unit

If the owner orders 300 or more

300×400

=120,000

The discount will be

55/100×120,000

=66,000

120,000 - 66,000

=54,000

He should take the discount

answer; i believe that the correct answer is (supply chain);

years agooo ahaha. but honestly they need to update ! : )