Answer:
5,500 units
Explanation:
Use the economic order quantity (EOQ) formula to calculate the estimated annual demand
EOQ = [tex]\sqrt{\frac{2DS}{H} }[/tex]
Where
EOQ = 100 units
S = Oerdering cost = $30
H = Carrying cost per unit = $15
D = Annua Demand = ?
Placing values in the formula
100 units = [tex]\sqrt{\frac{2D (30) }{15} }[/tex]
Taking Square on both sides
[tex]100^{2}[/tex] = [tex](\sqrt{\frac{2D (30) }{15} })^{2}[/tex]
10,000 = [tex]\frac{2D (30) }{15} }[/tex]
10,000 = [tex]\frac{60D }{15} }[/tex]
10,000 = 4D
D = 10,000 / 4
D = 2,500 units
Now calculate the estimated annual demand
Estimated annual demand = Annual Demand + Expected Increase in next month = 2,500 units + 3,000 units = 5,500 units
