Eoq

for example annual demand of a company-8000 units, ordering cost -200 per order, carrying cost -20%, selling price per unit- 400 for this we apply the eoq formula we need to order 200 units. in this we incurs total cost of RS.3216000. If we dont want to apply eoq we want order 4000 units. we incurs Rs.3360400. By applying EOQ in incurs minimum cost.

Elavarasi B

CA Inter

★ 46K+

26-Aug-22 07:31

EOQ means economic ordering quantity also known as reordering quantity. In a business the need to maintain stock so they wants to order the stock in EOQ the size of order which incurs ordering cost and carrying cost minimum.

Elavarasi B

CA Inter

★ 46K+

26-Aug-22 07:23