CAF-5 · Chapter 16 · Question 3 of 10
Replica Limited has an annual demand of 162,000 units for a specialized component. The cost of placing one order is Rs. 27,000, and the annual holding cost per unit is Rs. 300. What is the Economic Order Quantity (EOQ) for this component?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) 5,400 units
Explanation
The EOQ formula is: sqrt((2 * Co * D) / Ch). In this case: sqrt((2 * 27,000 * 162,000) / 300) = sqrt(8,748,000,000 / 300) = sqrt(29,160,000) = 5,400 units.
More Inventory Management MCQs
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