Question:
Moura uses the economic order quantity formula (EOQ) to establish its optimal reorder quantity for its single raw material. The following data relates to the stock costs:
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Purchase price:
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£15 per item
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Carriage costs:
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£50 per order
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Ordering costs:
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£5 per order
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Storage costs:
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10% of purchase price plus £0.20 per unit per annum Annual demand is 4000 units.
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What is the EOQ to the nearest whole unit?
A. 153 units
B. 170 units
C. 485 units
D. 509 units