Management Wishes to Use a FOQ Lot- Sizing Rule for an Item

question 97

Multiple Choice

Management wishes to use a FOQ lot- sizing rule for an item based on the economic order quantity. If the annual demand is 1200 units, the holding cost is $10/unit/year, and the setup cost is $50/lot, which one of the following fixed order quantities is most appropriate?

• A) 90 units
• B) 110 units
• C) 130 units
• D) 150 units

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