M. Cotteleer Electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. One of the components has an annual demand of 250 units, and this is constant throughout the year. Carrying cost is estimated to be $1 per unit per year, and the ordering cost is $20 per order.

A) 100

B) 2.5
C) 50
D) 45

To find the Economic Order Quantity (EOQ) for the component, we need to consider the annual demand, carrying cost, and ordering cost. The EOQ is the optimal order quantity that minimizes the total cost of inventory.

To calculate the EOQ, we can use the following formula:

EOQ = √((2 * D * S) / H)

Where:
D = Annual demand
S = Ordering cost per order
H = Carrying cost per unit per year

Given:
D = 250 units
S = $20 per order
H = $1 per unit per year

Plugging in these values, we get:

EOQ = √((2 * 250 * 20) / 1)

Simplifying this equation:

EOQ = √(10000)

EOQ ≈ 100 units

Therefore, the Economic Order Quantity (EOQ) for the component is approximately 100 units.

To calculate the economic order quantity (EOQ) for the component, we can use the formula:

EOQ = √((2 * D * S) / H)

Where:
D = annual demand (250 units)
S = ordering cost per order ($20)
H = carrying cost per unit per year ($1)

Plugging in the given values, we have:

EOQ = √((2 * 250 * 20) / 1)

EOQ = √((5000) / 1)

EOQ ≈ √5000 ≈ 70.71

Therefore, the economic order quantity (EOQ) for the component is approximately 70.71 units.