Question

A company procures 384 parts annually. The annual holding cost per part is ₹30. If the ordering cost is ₹1000, then the economic order quantity is \(\underline{\hspace{2cm}}\). [in integer]

Hint:

EOQ increases with demand and ordering cost but decreases with holding cost.

Answer 1

Correct Answer: 160

EOQ formula: \[ Q^ = \sqrt{\frac{2DS}{H}} \] Given: \[ D = 384, S = 1000, H = 30 \] \[ Q^ = \sqrt{\frac{2(384)(1000)}{30}} = \sqrt{\frac{768000}{30}} = \sqrt{25600} = 160 \] Thus the economic order quantity is: \[ \boxed{160} \]