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The manager is the one who is responsible for everything that happens in the company. It began with planning and progressed to regulating everything tomaintain production, quality, and cost while effectively utilizing all resources. The Economic Order Quantity is a fixed point meant to assist businesses in lowering the cost of purchasing and storing inventory.

Inventory is a balance-sheet current asset account that includes all raw materials, work-in-progress, and finished commodities that a firm has amassed. There are essentially two methods for implementing EOQ. Both ways, of course, need that you have previously calculated the corresponding expenditures.

Set up your formula in a spreadsheet application, manually compute EOQ one item at a time, and then manually enter the order quantity into your inventory system.

Given,

Annual demand = 1000 units

Carrying cost per unit = 100 per year

Ordering cost per unit = $ 25

Calculation of economic order quantity" (EOQ)

$$\begin{gathered} \text{EOQ}=\sqrt{\frac{2脳\mathrm{A}脳\mathrm{S}}{\mathrm{H}}} \\ \mathrm{where}, \\ \mathrm{A}=\mathrm{Annual}\mathrm{demand} \\ \mathrm{S}=\mathrm{Ordering}\mathrm{cost}\mathrm{per}\mathrm{unit} \\ \mathrm{H}=\mathrm{Carrying}\mathrm{cost}\mathrm{per}\mathrm{unit} \end{gathered}$$

$$\begin{gathered} \mathrm{EOQ}=\sqrt{\frac{2脳\mathrm{A}脳\mathrm{S}}{\mathrm{H}}} \\ =\sqrt{\frac{2脳1000脳25}{100}} \\ =22.36\mathrm{or}22\mathrm{units} \end{gathered}$$

So, Ray must order 22 units each time.