Economic Order Quantity(EOQ)

This query is : Resolved

A D - Loving Life (Querist)
Follow

18 November 2008 If consumption of material per annum : 10000kg
order placing cost per order: Rs. 50
cost per kg of raw materials :Rs. 2
Storage cost: 8 percent average inventory
Calculate the EOQ. Also no. of orders to b placed. Also Carrying Cost?

CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (Expert)
Follow

18 November 2008 EOQ= Sqrt 2*50*10000/.16
= 2500

No. of Orders:Demand/EOQ
= 10000/2500
= 4
Ordering cost: 50*4 = 200
Carrying cost: C*EOQ/2
= .16*2500/2 = 200

**Ordering and carrying cost should be equal at EOQ Level, in this que. its 200.

**DM

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now