Revision question on how to calculate economic order quantity and reorder level.



(a)    A company uses 15,000 units of stock item 6786 each year. The item has a purchase cost of Rs.4 per unit. The cost of placing an order for re-supply is Rs.220. The annual holding cost of one unit of the item is 10% of its purchase cost.
Required

  • What is the economic order quantity
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