What is the economic order quantity for this product

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Question: A consumer electronics retailer purchases digital cameras from a distributor for $50 each, in addition to an administrative and logistics cost of $100 per order. Demand for the product is assumed constant over time, with a demand rate of 500 units per year. The annualized cost to store a unit of inventory is computed as $40 / year-unit, reflecting that the product is fragile and the opportunity cost of shelf space within the retail store is high. What is the economic order quantity (EOQ) for this product?

 

 

Reference no: EM133604201

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