Question

Rambo Ltd. orders 500 units at a time, and places 30 orders per year. Total ordering...

Rambo Ltd. orders 500 units at a time, and places 30 orders per year. Total ordering cost is $3,200 and total carrying cost is $2,500. Which of the following statements is true?

Total inventory-related cost is lower than it would be at the economic order quantity (EOQ).
The economic order quantity (EOQ) is 500.
The economic order quantity (EOQ) is less than 500.
The economic order quantity (EOQ) is more than 500.

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