EOQ

CAN ANYONE EXPLAIN ME THAT WHEN WE ARE CALCULATING CARRYING COST IN COSTING THEN WHY ECONOMIC ORDER QUANTITY (EOQ) IS DIVIDED BY 2. THE EXACT FORMULAE OF CARRYING COST IS EOQ/2+CARRYING COST PER UNIT PLS HELP MEEEEE

Replies (2)

coz we got to take the avg inventory in our calculation

we do this coz when we get the goods after placing the order, till the time we will place next order our first order will come to end

so thats why we take the avg inventory

plzz tell me if i am wrong

cheers

as the EOQ is not to be retained throughout the period

so avg. qty. is to be calculated during the period

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