Jack's Tracks sells 24,000 custom-designed GoKarts per year. These GoKarts are sold evenly throughout the year. The

Question:

Jack's Tracks sells 24,000 custom-designed GoKarts per year. These GoKarts are sold evenly throughout the year. The manufacturer charges Jack a $50 processing cost per order, and Jack incurs a carrying cost of $240 per year including storing each GoKart at a local warehouse. What is the economic order quantity for ordering materials?

a. 100

c. 2,000

b. 1,000

d. 10,000

Economic Order Quantity
Economic order quantity (EOQ) is the ideal order quantity a company should purchase to minimize inventory costs such as holding costs, shortage costs, and order costs. This production-scheduling model was developed in 1913 by Ford W. Harris and has...