The Purchase Department of your organisation has received an offer of quantity discounts on its orders of materials as under:

The annual requirement for the material is 5,000 tonnes. The ordering cost per order is Rs. 1,200 and the carrying cost is estimated at 20% per annum.
You are required to compute the most economic order quantity presenting the information in a tabular form.

Transcribed Image Text:

Price per tonne Rs. 1,200 1,180 1,160 1,140 1,120 Tonnes Less than 500 500 and less than 1,000 1,000 and less than 2,000 2,000 and less than 3,000 3,000 and above.