Question: A consumer electronics retailer purchases digital cameras from a distributor for $50 each, in addition to an administrative and logistics cost of $100 per order.

A consumer electronics retailer purchases digital cameras from a distributor for $50 each, in addition to an administrative and logistics cost of $100 per order. Demand for the product is assumed constant over time, with a demand rate of 500 units per year. The annualized cost to store a unit of inventory is computed as $40 / year-unit, reflecting that the product is fragile and the opportunity cost of shelf space within the retail store is high. What is the economic order quantity (EOQ) for this product

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