Question
Consider the following information.
src="https://www.ixambee.com/questionimage/Chapter/1690527927-31.JPG" alt="" /> What will be the Economic Ordering Quantity (EOQ)?Solution
A-2400(Annual Demand) B-4.00(Ordering Cost per order) C-2.40×12%=0.288(Carrying Cost per order) According to the formula, EOQ=√2AB/C Putting the values, EOQ=√2×2400×4/0.288 =√80000 =258.1 units or 258 units. Therefore, EOQ is 258 units.
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