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Find the economic order quantity. Annual demand- 12000 units. Ordering cost- Rs. 90 per order. Inventory carrying cost- Rs. 15 per annum?
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Find the economic order quantity. Annual demand- 12000 units. Ordering...
Calculating Economic Order Quantity
- Annual Demand: 12000 units
- Ordering Cost: Rs. 90 per order
- Inventory Carrying Cost: Rs. 15 per annum
Explanation
- Economic Order Quantity (EOQ) is the optimum quantity of inventory to be ordered at one time to minimize the total cost of inventory management.
- EOQ can be calculated using the following formula:
EOQ = sqrt((2 x Annual demand x Ordering cost) / Inventory carrying cost) - Substituting the given values in the formula:
EOQ = sqrt((2 x 12000 x 90) / 15) = 774.6 - Therefore, the economic order quantity for this scenario is 774.6 units.
Conclusion
- The economic order quantity helps in minimizing the total cost of inventory management by determining the optimum order quantity.
- By using the given values, the EOQ for this scenario is calculated to be 774.6 units.
- This information can help in making informed decisions about inventory management and ordering policies.
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Find the economic order quantity. Annual demand- 12000 units. Ordering cost- Rs. 90 per order. Inventory carrying cost- Rs. 15 per annum?
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Find the economic order quantity. Annual demand- 12000 units. Ordering cost- Rs. 90 per order. Inventory carrying cost- Rs. 15 per annum? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Find the economic order quantity. Annual demand- 12000 units. Ordering cost- Rs. 90 per order. Inventory carrying cost- Rs. 15 per annum? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Find the economic order quantity. Annual demand- 12000 units. Ordering cost- Rs. 90 per order. Inventory carrying cost- Rs. 15 per annum?.
Find the economic order quantity. Annual demand- 12000 units. Ordering cost- Rs. 90 per order. Inventory carrying cost- Rs. 15 per annum? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Find the economic order quantity. Annual demand- 12000 units. Ordering cost- Rs. 90 per order. Inventory carrying cost- Rs. 15 per annum? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Find the economic order quantity. Annual demand- 12000 units. Ordering cost- Rs. 90 per order. Inventory carrying cost- Rs. 15 per annum?.
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