GATE ME 2024 Set 1 — Question 38
Go beyond PYQs with Success TrackerAI-powered personalised practice and doubt support. Unlimited practice on eligible plans; AI usage limits apply.MCQ+2 / -0.67MediumEOQ ModelInventory ControlIndustrial Engineering
Industrial Engineering → Inventory Control → EOQ Model
Last updated
Question
A company orders gears in conditions identical to those considered in the economic order quantity (EOQ) model in inventory control. The annual demand is 8000 gears, the cost per order is 300 rupees, and the holding cost is 12 rupees per month per gear. The company uses an order size that is 25% more than the optimal order quantity determined by the EOQ model. The percentage change in the total cost of ordering and holding inventory from that associated with the optimal order quantity is
Correct answer
(A) 2.5
Solution
The total cost in the EOQ model is . At the optimal order quantity , the ordering cost equals the holding cost: .
Let the new order size be , where .
For :
The percentage change is .
Let the new order size be , where .
For :
The percentage change is .
Continue learning with Success Tracker
A step still unclear? Work through it with support
Use Success Tracker to ask about the reasoning, then try another GATE ME question to check your understanding.
AI-powered practice· Unlimited practice on eligible plans
- PYQs with solutions
- Attempt available previous-year questions, then compare your reasoning with the worked solution. Coverage varies by stream.
- Practice that adapts
- Choose a topic, work on weaker areas and bookmark questions to revisit. Your attempts feed your progress tracking.
- AI doubt support
- Ask follow-up questions about a step or concept while practising, instead of stopping at the final answer.
Unlimited practice is available on eligible plans. Free practice and AI usage have limits; check the current plan allowances before choosing.
This page stays readable without an account. AI responses can be wrong; check them against the solution and source material.
More questions on Inventory Control
2026 Set 1 Q46An objective function of primal variables ( and ) is described below: Minimize…2026 Set 1 Q47Four jobs are on order in a factory. As on day 20 of the production calendar, the corresponding due…2026 Set 1 Q60The actual demand for castings in a factory is units and units for the months of…2026 Set 1 Q61The inventory holding cost of an item is ₹ 0.50 per unit per month and the ordering cost per order…2026 Set 1 Q65The activities of a PERT network and their corresponding activity time estimates (in weeks) i.e.,…