How many orders per year are placed when EOQ is used in the mountain bikes scenario?

How many orders per year are placed when EOQ is used in the mountain bikes scenario?

• A. 6 orders
• B. 8 orders
• C. 12 orders
• D. 24 orders

Answer: (C)

In EOQ planning, the number of orders placed per year is determined by dividing the annual demand by the order quantity: N = D / Q*. The EOQ quantity minimizes total annual cost, balancing ordering and holding costs, so the frequency of orders is set by how large the annual need is relative to how large each order is. If the mountain bikes scenario yields 12 orders, that means the annual demand is 12 times the EOQ size, so you would be ordering roughly once a month. The other options would correspond to different D to Q* ratios, but the EOQ-based calculation in this case gives N = 12.

In EOQ planning, the number of orders placed per year is determined by dividing the annual demand by the order quantity: N = D / Q*. The EOQ quantity minimizes total annual cost, balancing ordering and holding costs, so the frequency of orders is set by how large the annual need is relative to how large each order is.

If the mountain bikes scenario yields 12 orders, that means the annual demand is 12 times the EOQ size, so you would be ordering roughly once a month. The other options would correspond to different D to Q* ratios, but the EOQ-based calculation in this case gives N = 12.