10 units are your economic order quantity if your annual demand is 100 units, the order placement cost is $25, and the holding cost per unit per year is $50.
Annual demand (D) = 100 units
Ordering cost (S) = $25
Holding cost (H) =$50
Economic order quantity = √(2DS/H)
= √[(2 × 100 × 25)/50]
= √(5000/50)
= √100
= 10 units.
Economics is the study of scarcity and its effects on the use of resources, the production of goods and services, the growth of output and wealth over time, and many other complex issues essential to society. Economics is a discipline that combines political science, sociology, psychology, and history.
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