GATE ME 2018 Set 2 — Question 28
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Industrial Engineering → Inventory Control → EOQ Model
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Question
A local tyre distributor expects to sell approximately 9600 steel belted radial tyres next year. Annual carrying cost is Rs. 16 per tyre and ordering cost is Rs. 75. The economic order quantity of the tyres is
Correct answer
(C) 300
Solution
Given:
Annual Demand () = 9600 units
Ordering Cost () = Rs. 75 per order
Carrying Cost () = Rs. 16 per unit per yearThe Economic Order Quantity (EOQ) is calculated using the formula:Therefore, the economic order quantity is 300.
Annual Demand () = 9600 units
Ordering Cost () = Rs. 75 per order
Carrying Cost () = Rs. 16 per unit per yearThe Economic Order Quantity (EOQ) is calculated using the formula:Therefore, the economic order quantity is 300.
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