GATE ME 2016 Set 1 — Question 64
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Industrial Engineering → Inventory Control → EOQ Model
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Question
The annual demand for an item is units. The unit cost is Rs. and inventory carrying charges are of the unit cost per annum. The cost of one procurement is Rs. . The time between two consecutive orders to meet the above demand is _______ month(s).
Correct answer
1.9 to 2.1
Solution
To find the time between consecutive orders, we first calculate the Economic Order Quantity ().Given:
Step 2: Calculate the number of orders per year ()Step 3: Calculate the time between orders () in monthsThe time between two consecutive orders is months.
- Annual Demand () = units/year
- Unit Cost () = Rs.
- Inventory carrying charge percentage () = per annum
- Carrying cost per unit per year () =
- Ordering cost per order () = Rs.
Step 2: Calculate the number of orders per year ()Step 3: Calculate the time between orders () in monthsThe time between two consecutive orders is months.
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