Demand for an item is 1,100 units per year. Each order placed costs $9; the annual cost to carry items in inventory is $2 each. In what quantities should the item be ordered?

100 units

Explanation:

Economic order quantity (EOQ) is the order quantity that minimizes the total holding costs and ordering costs. We calculate EOQ by using the formula where Q is the economic order quatity, D is the the annual demand in units, S is the order cost per order and H is the holding cost per unit per year.

= = 99.498 units

- Since you cannot order a fraction of a unit, we round up the order quantity to get the optimal order quantity which is 100 units

lbc corporation makes and sells a product called product wz. each unit of product wz requires 4.1 hours of direct labor at the rate of $20.00 per direct labor-hour. management would like you to prepare a direct labor budget for june. the company plans to sell 28,000 units of product wz in june. the finished goods inventories o