Bean corp. expects total sales of $60,000. the price per unit is $10. the company estimates an ordering cost of $25 per order, with an inventory cost of $0.70 per unit. what is the optimum order size?

The optimum order size is 2,070 units.

Explanation:

For computing the optimum order size, we have to compute the economic order quantity which is shown below:

=

where,

annual demand is 60,000

Ordering cost is 25 per order

and carrying cost is 0.70 per unit

Now put the values to the above formula

So, the answer would be

=  

= 2,070 units

Hence, the optimum order size is 2,070 units.

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