Question

Comfy Furniture sells 2,800 couches per year at an average price of $1,080. The carrying cost...

Comfy Furniture sells 2,800 couches per year at an average price of $1,080. The carrying cost per couch is $10.00 and the fixed order cost is $140. What is the economic order quantity for the couches? (Show your work)

Multiple choice:

a. 326.67 units

b. 311.11 units

c. 280.00 units

d. 233.33 units

e. 359.33 units

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Homework Answers

Answer #1
Annual Demand                2,800.00
Ordering costs                    140.00
Carrying costs                      10.00
EOQ = Underroot(2*A*O)/C
EOQ = Underroot(2*2800*140)/10
EOQ = Underroot(784000/10)
EOQ = Underroot(78400)
EOQ = 280 Units
So correct answer is c) 280.00 units
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