Question

Sonu runs an electrical shop in Lucknow. the most sold product in his shop is ceiling fans. the annual demand for fans is 32000 the annual holding cost per unit is rupees 192 the cost incurred in placing an order is rupees 3000 calculate economic order quantity​

Answer 1

Answer:

Economic Ordering Quantity = √2/DP/C  Where;  2 is constant  D = Annual demand  P = cost of placing the order  C = Inventory holding cost/ carrying cost Thus as : annual demand(D)= 32,000   Order cost(P) = Rs. 3,000   Annual carrying cost of 1 unit(C) = Rs. 192 = 1000 Units Read more on Sarthaks.com - https://www.sarthaks.com/297836/iqbal-runs-an-electrical-shop-in-lucknow-the-most-sold-product-in-his-shop-is-ceiling-fans