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
Options :
64
212
300
1200
Answer :
300
Solution :
D = 9600
Ch = Rs. 16/year
C0= Rs. 75/order
EOQ = √(2DC/Ch ) = √(2*9600*75/16)
= √(1200*75) = 300
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