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The annual demand for a product is 60,000 units, the ordering cost is Rs. 8000 per order. Considering Wilsons model, the EOQ is 12,000
units. When the annual inventory cost is minimized, the annual inventory holding cost is Rs ___________
  • a)
    40,000
  • b)
    40,000
Correct answer is between ' 40,000, 40,000'. Can you explain this answer?
Verified Answer
The annual demand for a product is 60,000 units, the ordering cost is...
D = 60,000
Co = Rs. 8000/order
EOQ = 12,000
Annual inventory holding cost
= Rs. 40,000
View all questions of this test
Most Upvoted Answer
The annual demand for a product is 60,000 units, the ordering cost is...
Calculation of Annual Inventory Holding Cost:
- The Economic Order Quantity (EOQ) is 12,000 units.
- The annual demand for the product is 60,000 units.
- The ordering cost is Rs. 8,000 per order.

Formula for Annual Inventory Holding Cost:
Annual Inventory Holding Cost = (EOQ/2) * Holding Cost per Unit

Calculation:
- Given EOQ = 12,000 units
- Annual Demand = 60,000 units
- Annual Orders = Annual Demand / EOQ = 60,000 / 12,000 = 5 orders
- Total Ordering Cost = Annual Orders * Ordering Cost per Order = 5 * Rs. 8,000 = Rs. 40,000

Conclusion:
The annual inventory holding cost is Rs. 40,000.
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Community Answer
The annual demand for a product is 60,000 units, the ordering cost is...
D = 60,000
Co = Rs. 8000/order
EOQ = 12,000
Annual inventory holding cost
= Rs. 40,000
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The annual demand for a product is 60,000 units, the ordering cost is Rs. 8000 per order. Considering Wilsons model, the EOQ is 12,000units. When the annual inventory cost is minimized, the annual inventory holding cost is Rs ___________a) 40,000b) 40,000Correct answer is between ' 40,000, 40,000'. Can you explain this answer?
Question Description
The annual demand for a product is 60,000 units, the ordering cost is Rs. 8000 per order. Considering Wilsons model, the EOQ is 12,000units. When the annual inventory cost is minimized, the annual inventory holding cost is Rs ___________a) 40,000b) 40,000Correct answer is between ' 40,000, 40,000'. 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 The annual demand for a product is 60,000 units, the ordering cost is Rs. 8000 per order. Considering Wilsons model, the EOQ is 12,000units. When the annual inventory cost is minimized, the annual inventory holding cost is Rs ___________a) 40,000b) 40,000Correct answer is between ' 40,000, 40,000'. 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 The annual demand for a product is 60,000 units, the ordering cost is Rs. 8000 per order. Considering Wilsons model, the EOQ is 12,000units. When the annual inventory cost is minimized, the annual inventory holding cost is Rs ___________a) 40,000b) 40,000Correct answer is between ' 40,000, 40,000'. Can you explain this answer?.
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