Question

(c) 200
(d) 80
36-37. Expected annual usage of a particular raw materials is 2,00,000 units and the economic
order quantity is 10,000 units. The invoice cost of each unit is 500 and the cost to place are
order is 80.
36. The average inventory is
(a) 1,00,000 units
(b) 5,000 units
(c) 10,000 units
(d) 7,500 units
37. The estimated annual order cost is
(a) 1,600
(b) * 10,000
(c) 3.200
(d) 5,000
​

Answer 1

Answer:

n..;;l.vhb.l

Explanation:

200

(d) 80

36-37. Expected annual usage of a particular raw materials is 2,00,000 units and the economic

order quantity is 10,000 units. The invoice cost of each unit is 500 and the cost to place are

order is 80.

36. The average inventory is

(a) 1,00,000 units

(b) 5,000 units

(c) 10,000 units

(d) 7,500 units

37. The estimated annual order cost is

(a) 1,600

(b) * 10,000

Answer 2

Answer:

(Q.36) Correct option is (b)

(Q.37) Correct option is (a)

Explanation:

Average inventory = EOQ/2

                              = 10,000/2

                              = 5,000 units

Annual order cost = (D/Q) × Co, where Co is Ordering cost per order

                              = (2,00,000/10,000) × 80

                              = 20 × 80

                              = 1600