Answer:
77.48 units
Explanation:
Data provided in the questions
Annual demand = 395 units
Ordering cost = $38
Holding cost per unit per year = $5
The computation of the economic order quantity is shown below:
[tex]= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}[/tex]
[tex]= \sqrt{\frac{2\times \text{395}\times \text{\$38}}{\text{\$5}}}[/tex]
= 77.48 units
hence, the economic order quantity is 77.48 units
We simply applied the above formula so that approximate units could come. And it always expressed in units
