Question

If the EOQ is 400 units , the ordering cost is Rs. 0.20, the carring cost Rs.20, how many orders are placed per year

Answer 1

Given:

EOQ = 400 units

order costing = 0.20 Rs

Carrying cost = 20 Rs

To find:

 Per year how many orders are placed?

solution:

we all know that EOQ = sqrt{2AO/c}

where EOQ = 400, units O = rs.0.20,  and C = rs. 20

Therefore,

400 = sqrt{(2*A*0.20)/20}

160000 = (2*A*0.20)/20

A= 8,000,000

note: A= Consumption of the article during a year, O = ordering cost and C carrying cost

So final answer is 8,000,000.