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A company has an annual demand of 2000 units, ordering cost is Rs. 100 per order & carrying cost is Rs. 8 per unit year, the shortage cost is Rs. 20 per unit year. The amount of shortage will be:
    Correct answer is between '75,76'. Can you explain this answer?
    Most Upvoted Answer
    A company has an annual demand of 2000 units, ordering cost is Rs. 100...
    And carrying cost is Rs. 10 per unit per year. The company wants to determine the economic order quantity (EOQ) for its inventory management.

    To find the economic order quantity (EOQ), we can use the formula:

    EOQ = √((2 * D * S) / H)

    Where:
    D = annual demand = 2000 units
    S = ordering cost per order = Rs. 100
    H = carrying cost per unit per year = Rs. 10

    Plugging in the values:

    EOQ = √((2 * 2000 * 100) / 10)
    = √(4000000 / 10)
    = √400000
    = 632.45

    Therefore, the economic order quantity (EOQ) for the company's inventory management is approximately 632.45 units.
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    A company has an annual demand of 2000 units, ordering cost is Rs. 100 per order & carrying cost is Rs. 8 per unit year, the shortage cost is Rs. 20 per unit year. The amount of shortage will be:Correct answer is between '75,76'. Can you explain this answer?
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