The Universal Computer Company uses a newly developed A1 chip in the manufacture of their tablet computers. The estimated annual demand for this chip is 12,000 units. It is estimated that the cost to place an order is $75, and the holding cost for each chip is $20 per year. The company operates 320 days per year. What are the total annual holding and ordering costs if the Universal Computer Company orders using the EOQ quantity?

a. greater than $7,000

b. greater than $5,000 but less than or equal to $7,000

c. greater than $3000 but less than or equal to $5,000

d. less than or equal to $3,000

Answer rating: 100% (QA)

We can calculate Economic order quantityEOQ first because the ... View the full answer