Calculate Economic Order Quantity from the following details and also state the number of orders to be placed in a year: Consumption of materials per annum 50,000 kg Order placing cost per order 125/- Cost per unit of ra

Answer 6(d) Economic Order Quantity (EOQ) Formula: EOQ = √(2 * R * C p ) / C h Where: R = Annual Requirement (Consumption) = 50,000 kg C p = Ordering Cost per order = ₹125 C h = Holding Costs/Storage Cost per unit per annum = 5% of Cost per unit = 5% of ₹10 = ₹0.50 EOQ = √(2 * 50,000 * 125) / 0.50 = √(12,500,000) / 0.50 = √(25,000,000) = 5,000 units Number of Orders per annum: Number of Orders = Annual Requirement / EOQ = 50,000 / 5,000 = 10 orders