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A local tyre distributor expects to sell approximately 9600 steel belted radial tyres nextyear. Annual carrying cost in Rs. 16 per tyre and ordering cost is Rs. 75. The economicorder quantity of the tyres is
- a)64
- b)212
- c)300
- d)1200
Correct answer is option 'C'. Can you explain this answer?
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A local tyre distributor expects to sell approximately 9600 steel belt...
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A local tyre distributor expects to sell approximately 9600 steel belt...
Given data:
- Number of steel belted radial tyres expected to be sold next year = 9600
- Carrying cost per tyre = Rs. 16
- Ordering cost = Rs. 75
Explanation:
The economic order quantity (EOQ) is a formula used to determine the optimal order quantity that minimizes the total cost of inventory. It takes into account the carrying cost per unit, ordering cost, and the demand for the product.
The formula for calculating the EOQ is:
EOQ = √((2 * D * S) / H)
Where:
D = Annual demand
S = Ordering cost per order
H = Carrying cost per unit
Calculating the EOQ:
Given that the annual demand for steel belted radial tyres is 9600 units, the ordering cost is Rs. 75, and the carrying cost per unit is Rs. 16, we can substitute these values into the EOQ formula:
EOQ = √((2 * 9600 * 75) / 16)
Simplifying the equation:
EOQ = √(1440000 / 16)
EOQ = √90000
EOQ = 300
Therefore, the economic order quantity of the tyres is 300.
Conclusion:
The economic order quantity (EOQ) for the steel belted radial tyres is determined to be 300. This means that the distributor should place orders for 300 tyres at a time in order to minimize the total cost of inventory.
- Number of steel belted radial tyres expected to be sold next year = 9600
- Carrying cost per tyre = Rs. 16
- Ordering cost = Rs. 75
Explanation:
The economic order quantity (EOQ) is a formula used to determine the optimal order quantity that minimizes the total cost of inventory. It takes into account the carrying cost per unit, ordering cost, and the demand for the product.
The formula for calculating the EOQ is:
EOQ = √((2 * D * S) / H)
Where:
D = Annual demand
S = Ordering cost per order
H = Carrying cost per unit
Calculating the EOQ:
Given that the annual demand for steel belted radial tyres is 9600 units, the ordering cost is Rs. 75, and the carrying cost per unit is Rs. 16, we can substitute these values into the EOQ formula:
EOQ = √((2 * 9600 * 75) / 16)
Simplifying the equation:
EOQ = √(1440000 / 16)
EOQ = √90000
EOQ = 300
Therefore, the economic order quantity of the tyres is 300.
Conclusion:
The economic order quantity (EOQ) for the steel belted radial tyres is determined to be 300. This means that the distributor should place orders for 300 tyres at a time in order to minimize the total cost of inventory.
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A local tyre distributor expects to sell approximately 9600 steel belted radial tyres nextyear. Annual carrying cost in Rs. 16 per tyre and ordering cost is Rs. 75. The economicorder quantity of the tyres isa)64b)212c)300d)1200Correct answer is option 'C'. Can you explain this answer?
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A local tyre distributor expects to sell approximately 9600 steel belted radial tyres nextyear. Annual carrying cost in Rs. 16 per tyre and ordering cost is Rs. 75. The economicorder quantity of the tyres isa)64b)212c)300d)1200Correct answer is option 'C'. Can you explain this answer? for Mechanical Engineering 2024 is part of Mechanical Engineering preparation. The Question and answers have been prepared according to the Mechanical Engineering exam syllabus. Information about A local tyre distributor expects to sell approximately 9600 steel belted radial tyres nextyear. Annual carrying cost in Rs. 16 per tyre and ordering cost is Rs. 75. The economicorder quantity of the tyres isa)64b)212c)300d)1200Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for Mechanical Engineering 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A local tyre distributor expects to sell approximately 9600 steel belted radial tyres nextyear. Annual carrying cost in Rs. 16 per tyre and ordering cost is Rs. 75. The economicorder quantity of the tyres isa)64b)212c)300d)1200Correct answer is option 'C'. Can you explain this answer?.
A local tyre distributor expects to sell approximately 9600 steel belted radial tyres nextyear. Annual carrying cost in Rs. 16 per tyre and ordering cost is Rs. 75. The economicorder quantity of the tyres isa)64b)212c)300d)1200Correct answer is option 'C'. Can you explain this answer? for Mechanical Engineering 2024 is part of Mechanical Engineering preparation. The Question and answers have been prepared according to the Mechanical Engineering exam syllabus. Information about A local tyre distributor expects to sell approximately 9600 steel belted radial tyres nextyear. Annual carrying cost in Rs. 16 per tyre and ordering cost is Rs. 75. The economicorder quantity of the tyres isa)64b)212c)300d)1200Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for Mechanical Engineering 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A local tyre distributor expects to sell approximately 9600 steel belted radial tyres nextyear. Annual carrying cost in Rs. 16 per tyre and ordering cost is Rs. 75. The economicorder quantity of the tyres isa)64b)212c)300d)1200Correct answer is option 'C'. Can you explain this answer?.
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