Management Wishes to Use an FOQ Lot-Sizing Rule for an Item

Multiple Choice

Management wishes to use an FOQ lot-sizing rule for an item based on the economic order quantity. If the annual demand is 1,200 units, the holding cost is $10 per unit per year, and the setup cost is $50 per lot, which one of the following fixed-order quantities is most appropriate?

A) 90 units
B) 110 units
C) 130 units
D) 150 units