Question

Consider the following data with reference to elementary deterministic economic order quantity model

Annual demand of an item	100000
Unit price of the item (in Rs.)	10
Inventory carrying cost per unit per year (in Rs.)	1.5
Unit order cost (in Rs.)	30

The total number of economic orders per year to meet the annual demand is .

• A. 50

Answer 1

The correct option is A 50
$EOQ,Q^{\ast }=\sqrt{\frac{2C_{o}D}{C_h}}=\sqrt{\frac{2\times 100000\times 30}{1.5}}$

$\text{= 2000 units}$

Number of orders,

$N=\frac{D}{Q^{\ast }}=\frac{D}{EOQ}=\frac{100000}{2000}=50$