What is the eoq how many orders will be placed each year, Operation Management

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What is the eoq how many orders will be placed each year

Our company purchases microprocessors for use in our products and we purchase 2.5 million microprocessors each year.

Each time we place an order, it costs us $1,250 for all the paperwork, labor, postage, etc.

Each microprocessor costs us $2.53.

Our inventory holding cost is $0.557 per microprocessor

Assume that demand takes place at a constant rate.

What is the EOQ? How many orders will be placed each year? How much time will elapse between the placement of orders?

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