0 votes
in Statistics by (64.3k points)

A dealer supplies the following information with regard to a product dealt by him. Annual demand = 4500 units. Ordering cost = Rs. 20. Holding cost = Rs. 2.00. Shortage Cost = Rs. 12. Determine EOQ and Total variable cost.

1 Answer

+1 vote
by (59.5k points)
selected by
Best answer

Given: R = 4500 units ; 

C3 = Rs. 20 

C1=Rs. 2, C2 = Rs 12 

The economic order quantity is – 

Q° = 1052 units (Approx)

i.e., Q°= 324 Units. 

Total variable cost/minimum average cost is

C(Q°, S°) =Rs. 555.49

Welcome to Sarthaks eConnect: A unique platform where students can interact with teachers/experts/students to get solutions to their queries. Students (upto class 10+2) preparing for All Government Exams, CBSE Board Exam, ICSE Board Exam, State Board Exam, JEE (Mains+Advance) and NEET can ask questions from any subject and get quick answers by subject teachers/ experts/mentors/students.