M.E Company produces lawn mowers and purchases 4,500 units of a rotor blade part each year at a cost of $40 per unit. M.E requires a 15% annual rate of return on investment. In addition, the relevant carrying cost (for insurance, materials handling, breakage, etc.) is $2 per unit per year. The relevant ordering cost per purchase order is $75.

Relevant carrying costs per part per year is:

EOQ = square root of 2DP/C

Select one:

a. 2 b. 8 c. 40 d. 6 e. 75