Question

Calculate EOQ from the following information:- Annual Demand - 1600 units , Cost of placing an order -200 , Annual Carrying cost per unit -4 *

a) 400

b) 300

c) 500

d) 600​

Answer 1

Answer:

a). 400

EOQ (Economic Order Quantity) = 400

Explanation:

Given :

• Annual Demand (D) = 1,600 units

• Cost of placing an order (S) = 200

• Annual Carrying cost per unit (H) = 4

To find :

• Calculate EOQ (Economic Order Quantity) = Q

Solution :

★ EOQ Formula :

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

$\longrightarrow$ Q = $\sf{\sqrt{\dfrac{2 \times 200 \times 1,600}{4}}}$

$\longrightarrow$ Q = $\sf{\sqrt{\dfrac{6,40,000}{4}}}$

$\longrightarrow$ Q = $\sf{\sqrt{1,60,000}}$

$\longrightarrow$ Q = 400

Therefore,

a). 400

EOQ (Economic Order Quantity) = 400