Question

SS Company manufacturing electronic equipment purchase
transistors @30 per unit the annual requirement of transistors is 5000
units. The ordering cost is 200 per order. Carrying cost is 4/- per unit,
lead time is 5 days calculate EOQ and reorder point?

Answer 1

Answer:

EOQ = 707.10

Step-by-step explanation:

EOQ stands for Economic Ordering Quantity. It can be mathematically written as

= SQRT ((2 X Annual consumption X Cost per order) / (Holding cost))

As per given information,

Annual consumption = 5000

Cost per order = 200

Holding Cost = 4  

Putting the values in the above equation we have;

EOQ = SQRT (2 X5000 X200 / (4))

EOQ = SQRT (500000)

EOQ = 707.10