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Swiftspan inc. is a construction company. it uses 202,500 gallons of paint a year. if the ordering costs are $32 per order and holding costs are $9 per gallon, the optimal quantity of order is _____.

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MsTeel

1,200 Gallons.

Economic ordering quantity (EOQ) is the most cost efficient amount to order that minimizes both carrying and order costs. The formula is

[tex]\sqrt{(2*units  *ordering  costs)/holding  costs \\\\[/tex]

[tex]\sqrt{405,000*32 / 9\\\[/tex]

[tex]\sqrt{1,440,000[/tex]

1,200 gallons

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