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An item can be purchased for ₹ 100. The ordering cost is ₹ 200 and the inventory carrying cost is 10% of the item cost per annum. If the annual demand is 4000 units, the economic order quantity (in units) is
  • a)
    50
  • b)
    100
  • c)
    200
  • d)
    400
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
An item can be purchased for 100. The ordering cost is 200 and the i...
Order cost(Cb)₹= ₹ 200/order
Item cost
= ₹ 100
Demand D
= 4000 unit
Carrying cost (C1) = 10% of purchasing price per unit = Rs.10
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An item can be purchased for 100. The ordering cost is 200 and the inventory carrying cost is 10% of the item cost per annum. If the annual demand is 4000 units, the economic order quantity (in units) isa)50b)100c)200d)400Correct answer is option 'D'. Can you explain this answer?
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