A company manufactures a product having a monthly demand of 2000 units. For one unit of finished
Question:
A company manufactures a product having a monthly demand of 2000 units. For one unit of finished product 2 kg of a particular raw material item is needed. The purchase price of the materials is Rs. 20 per kg. The ordering cost is Rs. 120 per order and the holding cost is 10% per annum. Calculate:
(i) Economic order quantity, and
(ii) Annual cost of purchasing and storage of the raw material at that quantity.
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Monthly demand 2000 units Annual demand 2000 x 12 24000 units Raw materi...View the full answer
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Muhammad Salman Alvi
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