Thursday, 12 November 2015

Cima P1 Exam Question No 28

Question No 28:

RS is a retailer of pet products. A dog basket that it sells has an annual demand of 15,000 units. Demand is spread evenly throughout the year.
RS pays its supplier $60 for each basket. Ordering costs are $150 per order and the annual cost of holding one basket in inventory is estimated to be $6.
The economic order quantity (EOQ) for the dog basket to the nearest unit is:

A.
612 units
B.
173 units
C.
866 units
D.
1,025 units

Answer: C

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