Answer:
115 units
Explanation:
The computation of the economic order quantity is shown below:
[tex]= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}[/tex]
where,
Annual demand is 38,948 units
Ordering cost is $4.26 per order
And, the carrying cost or holding cost is $25 per unit per year
Now placing these values to the above formula
So,
[tex]= \sqrt{\frac{2\times \text{38,948}\times \text{\$4.26}}{\text{\$25}}}[/tex]
= 115 units
We simply applied the above formula so that the economic order quantity could come
