Answer:
A. 200 units per order
Explanation:
To solve this you have to use the economic order quantity formula:
[tex]Q_{opt} = \sqrt{\frac{2DS}{H}}[/tex]
Where:
Demand = 4,000
S= supply cost = ordering cost = 20
H= holding cost = 4
[tex]Q_{opt} = \sqrt{\frac{2*4000*20}{4}}[/tex]
Economic Order Quantity = 200
How to Remember:
Demand per year and order cost goes in the dividend.
Holding cost goes in the divisor.
