In the basic EOQ model, if D=60 per month, Co=$12, and Cc=$10 per unit per month, what is the EOQ?
A) 11
B) 12
C) 13
D) 14

Question

Quizplus · Accepted Answer

The Economic Order Quantity (EOQ) formula is $\sqrt{\frac{2DS}{H}}$, where D is the demand rate, S is the ordering cost, and H is the holding cost per unit per year. Plugging in the values given (D=60 per month, so D=720 per year; S=$12; H=$10), we get EOQ = $\sqrt{\frac{2*720*12}{10}}$ = $\sqrt{1728}$ = 12.

In the Basic EOQ Model, If D=60 Per Month, Co=$12