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What is the economic order quantity

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Question - The mechanical engineer at Robinson Manufacturing has developed a new gearbox. The local distributor expects to increase his sales by 30% over the past year due to this new development. Last year's sales were $70,000 at a selling price of $100 per unit. The manager would like to cut costs as much as possible and comes to you for advice.

Relevant cost information includes:

Warehouse space $3.00/unit

Material handling expense $2.00/unit

Insurance premium $1.00/unit

Total ordering cost $150.00/per order

Required - What is the economic order quantity?

a. 213 units

b. 187 units

c. 174 units

d. 522 units

Reference no: EM133047105

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