Saved Bookmarks
| 1. |
From the following information, calculate the extra cost of material by following EOQ:Annual consumption:=45000 unitsOrdering cost per order:= Rs. 10Carrying cost per unit per annum: = Rs. 10Purchase price per unit= Rs. 50Re-order quantity at present = 45000 unitsThere is discount of 10% per unit in case of purchase of 45000 units in bulk. |
|
Answer» Given: ANNUAL consumption = 45000 units Ordering COST per order: = RS. 10 Carrying cost per unit per annum = Rs. 10 Purchase price per unit = Rs. 50 To Find: EOQ Solution Annual Cost under EOQ - Annual Carrying Cost = 45000/300×10 = Rs. 1500 Thus, TOTAL cost under EOQ will be Rs. 3000. Annual Cost as per the current plan - Annual ordering cost = Rs.10 Annual Carrying cost = 45000/2 × 10 = Rs. 225000 Saving due to bulk order = 45000 × ( 50 × 10/100 ) = Rs.225000 Effective cost = Rs.10 Answer: The EXTRA cost will be Rs.3000 - 10 = Rs.2,990 |
|