Question

A factory required 1,000 units per year. The

cost of placing an order is Rs. 60 and

carrying cost is Rs. 3 p.a. The EOQ is​

Answer 1

Answer:

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Explanation:

Answer 2

Answer:

The EOQ is 200.

Explanation:

• The full form of EOQ is Economic Order Quantity.
• Economic Order Quantity: Economic order quantity is the ideal cost of a company to minimize the total cost.
• The formula for calculating economic order quantity is:

           Q = $\sqrt{\frac{2DS}{H} }$    Here, Q = Economic order quantity

       D = Annual demand in units, S = Placing order cost ,

      H = holding cost.

• Calculation: Given data -   D = 1,000 units per year,

          S = Rs. 60  and H = Rs. 3 p.a.

Putting the values in above formula, Q = $\sqrt{\frac{2 \times 1000 \times 60}{3} }$ = $\sqrt{40000}$  =  200

∴ The Economic order quantity is 200.

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