Question

About 2025 units are
required monthly for a
machine. A fixed cost of
Rs. 40 per order is
incurred for placing an
order. The carrying cost
of material per unit
amounts to Rs. 2.4 per
annum.compute EOQ.
2025 Units
D​

Answer 1

Step-by-step explanation:

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Answer 2

EOQ for this situation is 63.64

Explanation:

• If we denote

1. D: Annual Quantity Demanded
2. Q: Volume per Order
3. S: Ordering Cost (Fixed Cost)
4. C: Unit Cost (Variable Cost)
5. H: Holding Cost (Variable Cost)
6. i: Carrying Cost (Interest Rate)

• We have been Given H = 2.4, S = 40, D = 2025

• We have the Formula     $EOQ = \sqrt{\frac{2SD}{H}}$

• Therefore   $EOQ = \sqrt{\frac{2\times 40 \times 2025}{2.4}}$  = 63.639610306

IMPORTANT DEFINITIONS:

"The abbreviation (EOQ) stands for "economic order quantity." It's a measure used in supply chain management, operations, and logistics."