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Question on Economic Order Quantity
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This lesson throws light on question on economic order quantity.

Harshit Aggarwal
Cleared UPSC ESE twice with Rank 63 and 90 in mechanical engg. Got 99 percentile in GATE. Cracked ONGC, BHEL,ISRO, SAIL, GAIL successfully

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  1. COURSE: INDUSTRIAL ENGINEERING LESSON: QUESTIONS ON ECONOMIC ORDER QUANTITY


  2. ABOUT ME Graduated from NIT Nagpur in 2008 Cleared Engineering Services Examination (ESE-UPSC) Exam & Got the offer letter from most of the Maharatna and Navratna Companies * Cleared GATE Exam Rate, Review, Recommend, Share Follow me on Unacademy at: https://unacademy.in/user/harsh.t aggarwal


  3. QUESTION There are two products P and Q.The EOQ of products 'P' and Q' in ratio will be Product Demand Ordering Cost Holding Cost (Rs/unitlyear) (units) (Rs/order) 100 400 50 4 50 2 oa 2 1


  4. QUESTION Demand 10,000 pieces/year Cost/item Rs 50/- Interest-l % percent monthly-12% annum Ordering cost Rs 240/-


  5. SOLUTION


  6. QUESTION The annual demand is 18,000 units and cost price per unit is Rs 4/- Ordering cost CoRs120/order And inventory carrying cost is 12% of inventory value. Further, it is known that the lead time is 10 working days and total working days in a year are 300 Then determine ) Economic Order Quantity (EOQ) 2) Optimal number of orders per year 3) Length of inventory cycle 4) Total inventory cost at EOQ 5) Reorder Level 6) No. of days of stock at reorder level 7) Amount of saving with EOQ against earlier practice of 4 orders/year. 8) The increase in total cost associated with ordering a) 25% more than EOQ. b) 40% less than EOQ.


  7. SOLUTION 18000 l Ch .4S Bo00 N* 6


  8. SOLUTION 4 Increase- 1.560-14%, Rs 126


  9. SOLUTION CS) 6) 21 =1476 Rs. 36 = 1632 Rs142


  10. THANK YOU