Given: R = 3000, C_{3} = Rs. 25/order ; C_{1} = Rs. 2 per unit/year.

Here shortage cost C_{2} is not given use EOQ model

1.EOQ : Optimal order Quantity = Q°

= 273.86

= 274 units

2. Number of orders n°

Here t° = Q°/R = Q°/R

n° = 10.95 = 11 orders per year

3. Annual average inventory cost. C (Q°)

= Rs. 547.72/year