What is the EOQ for Carmel Company and how many orders will Carmel Company placeunder the EOQ policy?

To calculate the Economic Order Quantity (EOQ) and the number of orders that Carmel Company will place under the EOQ policy, we will follow the steps below:

1. Break Down the Problem

We need to find:

1. The EOQ value using the EOQ formula.
2. The number of orders placed per year under EOQ.

2. Relevant Concepts

The EOQ formula is given by:

$EOQ = \sqrt{\frac{2DS}{H}}$

Where:

• $D$ = Demand rate (units per year)
• $S$ = Ordering cost per order
• $H$ = Holding cost per unit per year

The number of orders placed annually can be calculated as:

$\text{Number of Orders} = \frac{D}{EOQ}$

3. Analysis and Detail

1. Calculate EOQ: Substitute the known values of $D$, $S$, and $H$ into the EOQ formula.

2. Calculate Number of Orders: Using the EOQ calculated in the first step, substitute it along with the demand $D$ to find the number of orders.

4. Verify and Summarize

Make sure that the values are properly substituted into the formulas and that the calculations are accurate.

Final Answer

To provide the final result, please supply the values for $D$ (annual demand), $S$ (ordering cost), and $H$ (holding cost).