In the basic EOQ model, if D = 5,000 per year, S = $100, and H = $1 per unit per month, then the total approx. cost of the EOQ ordering policy is (round up decimal figures, if any, in your computations)?

Pick the answer option closest to the precise answer.

EOQ = Sq root of [(2D*S)/H]

D = annual demand in units

S = cost of placing 1 order; H = cost of holding 1 unit of that item in inventory for 1 year

and

TC= # of orders/yr * S + Avg. Inventory * H.

Average inventory = (Beginning Inv + Ending Inv)/2;

# of Orders/yr = D/order qty

		$3540.00
		$1000.00
		$2065.00
		$1200.00