Explain this...........?

1/2*EOQ IS Average unit,u ve not even basic grasp in this subject,refer good book,if live near delhi,take N.K.AGGRWAL COSTING BOOK

 Hi Priyanka,

                     Different books give different alphabets for the formulas

Whatever it may be,Total carrying cost = avg inventory x carrying cost per unit per annum

avg inventory is same as 1/2 EOQ as there is so safety stock here. If there was any safety stock u wud hav too add it to 1/2 of EOQ to get the avg inventory.I hope u get the logic clear

Total carrying Cost = 1/2 x EOQ x Carrying Cost P.u.

dear,

this is the formula for calculating total carrying cost here 1/2 X EOQ refer to the average of quantity ordered.