Question

calculate economic order quantity from the following information . annual demand 3200 units, cost of an order rs. 150, unit cost rs.6 , carrying cost 25℅ per annum. ​

Answer 1

Answer:

EOQ (Economic Order Quantity) = 800 units

Explanation:

Given :

• Annual demand (D) = 3,200 units

• Cost of an order (S) = Rs. 150

• Unit cost (C) = Rs. 6

• Holding Cost in % (I) = 25%

• Holding Cost in Rs. (H) = I × C

To find :

• Calculate EOQ (Economic Order Quantity) = Q

Solution :

Holding Cost (H) = I × C

$\longrightarrow{\sf{6 \times \dfrac{25}{100}}}$

$\longrightarrow$ 1.5

• Holding Cost (H) = 1.5

★ EOQ Formula :

$\sf{Q={\sqrt{ \dfrac{2SD}{H}}}}$

$\sf{Q={\sqrt{ \dfrac{2 \: \times \: 150 \: \times \: 3,200 }{1.5}}}}$

$\sf{Q={\sqrt{\dfrac{9,60,000}{1.5}}}}$

$\sf{Q={\sqrt{6,40,000}}}$

Q = 800 units

∴ EOQ (Economic Order Quantity) = 800 units