Question
Determine the Economic Batch Quantity (EBQ) for the
following data: Annual requirement of parts: 36,000 units Inventory holding cost: 20% of the part value per year Setup cost: ₹450 per setup Cost per part: ₹150Solution
The ordering quantity Q* at which holding cost becomes equal to ordering cost and the total inventory cost is minimum is known as Economic order Quantity (EOQ). D = 36000 units, Order Cost per order = Rs. 450, carrying cost per annum per unit= 20% of value/year = Rs. 30 -Constable/1723455039-101.JPG)
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