Consider the following data for a product:
Demand = 1000 units/year
Order cost = Rs.40/order
Holding cost = 10% of the unit cost / unit-yr
Unit cost = Rs.5000
(a) What is the economic order quantity?
(b) Under the EOQ what is the number of annual orders?
(c) With a policy of ordering every month what would be the total annual cost as a percentage of the cost at EOQ?