Question: (a) ABC Ltd. Uses EOQ logic to determine the order quantity for its various components and is planning its orders. The annual consumption is 80,000

(a) ABC Ltd. Uses EOQ logic to determine the order quantity for its various components and is planning its orders. The annual consumption is 80,000 units. The cost to place one order is 1200 and cost per unit is 50 while carrying cost is 6% of unit cost. Find:

(i) EOQ

(ii) Number of orders per cycle

(iii) Ordering cost

(iv) Carrying cost

(v) Total cost of inventory (3 marks each= 15 marks)

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