Question

A particular item has a demand of 9000 units per year. The cost of one procurement is Rs.100 and the holding cost per year is Rs.2.40 per year. The shortage cost is Rs.5 per unit per year. Determine the following:
(a) the economic lot size
(b) the number of order per day
(c) the time between order
(d) the total variable inventory cost per year
(e) the total inventory cost per year if the cost of one unit is Re.1

Answer 1

Answer:

(a) the economic lot size