Question

for a ltd annual demand is 10000 units,carrying cost is rs 2 per unit and order cost is rs 50.calculate eoq

Answer 1

In the above scenario if we wish to calculate the EOQ which stands for Economic order quantity, we shall have to apply the following formula.

Economic order quantity = the square root of [twice (demand times ordering costs) divided by the carrying costs]

Therefore, if we substitute the values given in the question into the above formula we get the EOQ which is 707.

Answer 2

EOQ = 707.10 unit (Approx)

Explanation:

Given:

Annual demand (D) = 10,000 units

Carrying cost (H) = R.s 2 per unit

Order cost (S) =  R.s 50

EOQ = ?

Computation of EOQ:

$EOQ = \sqrt{\frac{2DS}{H} } \\\\EOQ = \sqrt{\frac{2(10,000)(50)}{2} } \\\\EOQ = 707.106781$

EOQ = 707.10 unit (Approx)

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