INVENTORY MODEL
The demand for a particular item is 10 000 units per yer. The number of units per order is 900. The set cost is rs 90 per order, the cost of item is rs2 per item and the holding cost is rs 080 per item per month. If no shortages are allowed and the replacement is instantaneous :
find
EOQ, the time between orders, numbr of ordersper year the minimum total yearly inventory cost>
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DEMAND- 10 000
NUM. OF UNITS PER YEAR ; 900
ORDERING COST- RS 90
holding cost -0.80
Purchase cost :rs2
Eoq: In a Square root , inside it: 2 xrs90 10,000 /0.80 =1500
number of order= 10 000/1500= 66.
time between orders = t=Q/D
which is 1500/10 000= 0.15
mimimum total yearly inventory cost =TC =d/eoq x ordering cost + Eoq/2 x holding cost = 1200
just check if its good.
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