Ms. Rosy is a ready made garments manufacturer. Her Annual Usage rate

1.	Ms. Rosy is a ready made garments manufacturer. Her Annual Usage rate is 225 Pcs. The cost of placing each order is Rs.8/- and the carrying cost is Rs.4 per unit. Calculate the Economic Order Quantity (EOQ). How does calculating EOQ facilitate budgeting?
Answer» a. EOQ = 2XPXD / C EOQ=2 X 225 X 8 /4 EOQ= 900 EOQ = 30 Units b. EOQ denotes the ideal quantity of raw material and goods to be ordered. This leads to optimum utilization of the financial resources.

Ms. Rosy is a ready made garments manufacturer. Her Annual Usage rate is 225 Pcs. The cost of placing each order is Rs.8/- and the carrying cost is Rs.4 per unit. Calculate the Economic Order Quantity (EOQ). How does calculating EOQ facilitate budgeting?

Answer»

a. EOQ = 2XPXD / C

EOQ=2 X 225 X 8 /4

EOQ= 900

EOQ = 30 Units

b. EOQ denotes the ideal quantity of raw material and goods to be ordered. This leads to optimum utilization of the financial resources.

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Ms. Rosy is a ready made garments manufacturer. Her Annual Usage rate is 225 Pcs. The cost of placing each order is Rs.8/- and the carrying cost is Rs.4 per unit. Calculate the Economic Order Quantity (EOQ). How does calculating EOQ facilitate budgeting?

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