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A company manufactures a product alpha which has annual demand of 12000 units. 1 unit of alpha requires 5 kg of material name. Ordering cost per order is 50 per order 10 kg of is available at purchase price of rs 20. Quarterly Carrying cost 4% calculate EOQ ,No. of order ,Order frequency in days, annual o.c, annual c.s, total cost.?
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A company manufactures a product alpha which has annual demand of 1200...
Calculation of EOQ and Total Cost for Product Alpha
Given Information:
- Annual Demand for product Alpha = 12000 units
- 1 unit of Alpha requires 5 kg of material name
- Ordering cost per order = Rs 50
- 10 kg of material is available at purchase price of Rs 20
- Quarterly Carrying cost = 4%
Calculation of EOQ:
EOQ = sqrt((2 x Annual Demand x Ordering Cost) / Carrying Cost per Unit)
- Carrying Cost per Unit = Purchase Price / 100 x Carrying Cost
- Carrying Cost per Unit = 20 / 100 x 4 = Rs 0.80
- EOQ = sqrt((2 x 12000 x 50) / 0.80) = 1500 units
Calculation of No. of Orders:
No. of Orders = Annual Demand / EOQ
- No. of Orders = 12000 / 1500 = 8 orders
Calculation of Order Frequency in Days:
Order Frequency in Days = No. of Working Days in a Year / No. of Orders
- No. of Working Days in a Year = 365
- Order Frequency in Days = 365 / 8 = 45.625 days
Calculation of Annual Ordering Cost:
Annual Ordering Cost = No. of Orders x Ordering Cost per Order
- Annual Ordering Cost = 8 x 50 = Rs 400
Calculation of Annual Carrying Cost:
Annual Carrying Cost = EOQ / 2 x Carrying Cost per Unit x Annual Demand / EOQ
- Annual Carrying Cost = 1500 / 2 x 0.80 x 12000 / 1500 = Rs 48
Calculation of Total Cost:
Total Cost = Annual Ordering Cost + Annual Carrying Cost + Annual Purchase Cost
- Annual Purchase Cost = Annual Demand x Purchase Price / EOQ = 12000 x 20 / 1500 = Rs 160
- Total Cost = Rs 400 + Rs 48 + Rs 160 = Rs 608
Conclusion:
The EOQ for product Alpha is 1500 units. Eight orders need to be placed in a year with an order frequency of 45.625 days. The annual ordering cost is Rs 400, and the annual carrying cost is Rs 48. The total cost of the product Alpha is Rs 608.
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A company manufactures a product alpha which has annual demand of 12000 units. 1 unit of alpha requires 5 kg of material name. Ordering cost per order is 50 per order 10 kg of is available at purchase price of rs 20. Quarterly Carrying cost 4% calculate EOQ ,No. of order ,Order frequency in days, annual o.c, annual c.s, total cost.?
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A company manufactures a product alpha which has annual demand of 12000 units. 1 unit of alpha requires 5 kg of material name. Ordering cost per order is 50 per order 10 kg of is available at purchase price of rs 20. Quarterly Carrying cost 4% calculate EOQ ,No. of order ,Order frequency in days, annual o.c, annual c.s, total cost.? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about A company manufactures a product alpha which has annual demand of 12000 units. 1 unit of alpha requires 5 kg of material name. Ordering cost per order is 50 per order 10 kg of is available at purchase price of rs 20. Quarterly Carrying cost 4% calculate EOQ ,No. of order ,Order frequency in days, annual o.c, annual c.s, total cost.? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company manufactures a product alpha which has annual demand of 12000 units. 1 unit of alpha requires 5 kg of material name. Ordering cost per order is 50 per order 10 kg of is available at purchase price of rs 20. Quarterly Carrying cost 4% calculate EOQ ,No. of order ,Order frequency in days, annual o.c, annual c.s, total cost.?.
A company manufactures a product alpha which has annual demand of 12000 units. 1 unit of alpha requires 5 kg of material name. Ordering cost per order is 50 per order 10 kg of is available at purchase price of rs 20. Quarterly Carrying cost 4% calculate EOQ ,No. of order ,Order frequency in days, annual o.c, annual c.s, total cost.? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about A company manufactures a product alpha which has annual demand of 12000 units. 1 unit of alpha requires 5 kg of material name. Ordering cost per order is 50 per order 10 kg of is available at purchase price of rs 20. Quarterly Carrying cost 4% calculate EOQ ,No. of order ,Order frequency in days, annual o.c, annual c.s, total cost.? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company manufactures a product alpha which has annual demand of 12000 units. 1 unit of alpha requires 5 kg of material name. Ordering cost per order is 50 per order 10 kg of is available at purchase price of rs 20. Quarterly Carrying cost 4% calculate EOQ ,No. of order ,Order frequency in days, annual o.c, annual c.s, total cost.?.
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