## Answers

**Economic Order Quantity (EOQ)** is the ideal quantity a company needs to order for its inventory to reduce invariable costs such as holding charges, storage charges, cost to order etc

The formula for EOQ is as follows= where D is demand, S is the cost of order and H is the cost of holding

Since units of EOQ is directly proportional to the square root of demand i.e. D, an increase in 30% of demand means existing EOQ units increases by.

**Steps:-**

Step 1:- EOQ Units=

Step 2:- Since demand increases by 30%, therefore new demand is 1.3D. Substituting the new value in the equation

New EOQ Units=

Step 3:- New EOQ Units=

Substituting the value of 500 units for earlier EOQ Units, new EOQ units will be 500

Therefore, New EOQ Units= 570.08i.e. **570 Units**

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