Question

Read the question carefuly and choose the correct answer for the given option
The order cost per order of an inventory is Rs. 400 with an annual carrying cost of Rs. 10
per unit. The Economic Order Quantity (EOQ) for an annual demand of 2000 units is​

Answer 1

Explanation:

EOQ formula

Determine the demand in units.

Determine the order cost (incremental cost to process and order)

Determine the holding cost (incremental cost to hold one unit in inventory)

Multiply the demand by 2, then multiply the result by the order cost.

Divide the result by the holding cost.