A factory is facing an annual demand of 1000000 items of a particular type. Each item costs Re.1 to the factory. Ordering cost is Rs. 12.50 per order and inventory carrying cost is 25 percent of unit price. What is the EOQ?
A. 10000 items
B. 5000 items
C. 3162 items
D. 7071 items
Answer:A
A factory is facing an annual demand of 1000000 items of a particular type. Each item costs Re.1 to the factory. Ordering cost is Rs. 12.50 per order and inventory carrying cost is 25 percent of unit price. What is the EOQ?
A. 10000 items B. 5000 items C. 3162 items D. 7071 items