Answer:
(B) 200 units per order.
Explanation:
With the economic order quantity formula we can solve for the minimum invnetory cost:
[tex]Q_{opt} = \sqrt{\frac{2DS}{H}}[/tex]
Where:
D = annual demand = 4,000
S= setup cost = ordering cost = 20
H= Holding Cost = 4.00
[tex]Q_{opt} = \sqrt{\frac{2(4,000)(20)}{4}}[/tex]
[tex]Q_{opt} = \sqrt{\frac{160,000}{4}}[/tex]
[tex]Q_{opt} = \sqrt{40,000}[/tex]
EOC = 200 units
