Answer:
179 units
Explanation:
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]
where,
Annual demand = 1,200 cases
Ordering cost = $40
And, the annual carrying cost is $3 per case
Now placing these values to the above formula
So, the optimal order quantity is
[tex]= \sqrt{\frac{2\times \text{1,200}\times \text{\$40}}{\text{\$3}}}[/tex]
= 179 units
Hence, the optimal order quantity is 179 units
