Given the Following, Calculate the EOQ for Mountaintop Medical Center

question 6

Multiple Choice

Given the following, calculate the EOQ for Mountaintop Medical Center:
Annual Usage in units :657
Cost per order :$42
Annual carrying cost/unit : 3.25
Average Lead Time for Delivery :1 Week

• A) 10 units
• B) 72 units
• C) 92 units
• D) 130 units

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Definitions:

Transfer Prices

Prices charged for the selling of goods and services between subsidiaries or divisions within the same company.

Variable Cost

Expenses that change in proportion to the level of production or business activity.

Negotiation

A strategic discussion that resolves an issue in a way that both parties find acceptable, often used in business to finalize deals, terms, and prices.

Investment Turnover

A metric assessing how effectively a firm turns asset investments into revenue.