Assume uniform annual demand for an item is 50,000 units, order costs are $10.00, and the annual cost of holding one unit in inventory is 5% of the $20.00 acquisition cost. the optimal order quantity is

a. 100.00 units.

b. 224.00 units.

c. 1,000 units.

d. 448.00 units

Optimal order quantity will be 1000 units

So option (c) will be correct answer

Explanation:

We have given annual demand for an item D = 5000 units

Order cost S = $10

Annual cost of holding H = 5 % of $20 which is equal to $1

So holding cost H = 1

We have to find the optimal order quantity

Optimal order quantity is given by

Optimal order quantity

So option (C) will be correct option