Answer:
200 units
Explanation:
For computing the number of units produced each time we need to applied the economic order quantity formula which is shown below:
[tex]= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}[/tex]
where,
Annual demand is 1,600 units
Ordering cost per order is $25
And, the carrying cost or holding cost per unit per year is $2
Now placing these values to the above formula
So, the economic order quantity is
[tex]= \sqrt{\frac{2\times \text{1,600}\times \text{\$25}}{\text{\$2}}}[/tex]
= 200 units
