Correct Answer - Option 4 : 1000√2
Concept:
Economic order quantity (EOQ) is represented with Q*
Q* = \(\sqrt {\frac{{2D{C_0}}}{{{C_h}}}} \)
Where D is annual demand, C0 is ordering cost, Ch is holding cost
Calculation:
Given:
Q* = 1000
\(\sqrt {\frac{{2D{C_0}}}{{{C_h}}}} \) = 1000
When demand D will be doubled then the new economic order quantity will be:
Q* = \(\sqrt {\frac{{2\left( {2D} \right){C_0}}}{{{C_h}}}} \)
=\(\sqrt {\frac{{2D{C_0}}}{{{C_h}}}} \)× √2
= 1000 × √2
= 1000√2