Answer:
EOQ = 35
Explanation:
EOQ: To calculate the optimum level of quantity to be ordered so we don't mismatch the demand in order to control the cost.
Formula:
[tex]EOQ= \sqrt{\frac{2* D * S }{H} }[/tex]
Where;
D= Annual demand per unit.
S = Cost per order.
H= Holding cost, which is calculated by Holding cost % into total units
Given Data:
D= 1000 units.
S= $150.
H= 25% * 1000 = $250
Putting the values into the formula:
[tex]EOQ= \sqrt{\frac{2* 1000* 150}{250} }[/tex]
EOQ = 35
