Companies have calculated their annual holding cost(CH) and annual ordering cost (Co). Which company uses EOQ for its order quantity?
a. Company E:CH-860 and CO - 1040
b. Company C:CH-1150 and CO - 1150
c. Company D:CH-790 and Co-650
d. Company A:CH-1290 and CO - 120
e. Company B:CH-1030 and CO - 1210
Answer: b. Company C:CH-1150 and CO - 1150
Explanation: Economic order quantity would be found when the ordering cost equals the annual holding cost.
Total cost = [Ordering cost + Annual holding cost]
Optimal order quantity will be computed when ordering cost = annual holding cost
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