Answer:
Approximate EOQ is 109.54 units
Explanation:
Economic order quantity is the level of units ordered which minimize the total cost.
The economic order quantity (EOQ) is computed by applying the following formula
EOQ = [ ( 2DO ) / H ]^1/2
where D = Annual Demand in units
S = Setup or ordering cost
H = Holding or carrying cost per unit, per year.
EOQ = [ ( 2 x 10,000 x $150 ) / $1,000 x 25% ]^1/2
EOQ = [ 3,000,000 / 250 ]^1/2
EOQ = 12,000^1/2
EOQ = 109.54 units
