QUESTION 1 The same scenario will be used for questions 21-30. Demand for a specific design of dining sets has been fairly large in the past several years and Statewide Furnishings, Inc. usually orders new dining sets 10 times a year. It is estimated that the ordering cost is $400 per order. The carrying cost is $50 per unit per year. Furthermore, State Wide Furnishings, Inc. has estimated that the stock out cost is $120 per unit per year. Based on forecast, the annual demand is 600 units. State Wide Furnishings, Inc. has 350 working days in a year and its lead time is 14 working days. Assume the inventory policy of Statewide Furnishings, Inc. does not allow stock out. Determine the economic order quantity. 117 98 34 24 None of the above

The economic order quantity is 98.

Explanation:

The economic order quantity (EOQ) can be described as the order quantity which results in the minimum the total holding costs and ordering costs.

Economic order quantity using the following formula:

...................... (1)

Where;

EOQ = economic order quantity = ?

D = Annual demand = 600

S = Ordering cost = $400

C = Carrying cost = $50

Substituting the values into equation (1), we have:

EOQ = 97.9795897113271

Approximating to a whole number, we have:

EOQ = 98

Therefore, the economic order quantity is 98.

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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