Question: Maxx Industry uses EOQ logic to determine the ordering quantity for its various components. The consumption of these components are 80,000 units per year. Every

Maxx Industry uses EOQ logic to determine the ordering quantity for its various

components. The consumption of these components are 80,000 units per year. Every year on

an average 1000 orders are placed. It costs Maxx Industry Rs. 1,200 for placing a single order.

Cost per unit of the component is Rs. 50 and inventory carrying cost is estimated to be Rs.3

per unit per annum. What should be Maxx Industry's EOQ and what will be its Total Cost of

Inventory.

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