The EOQ for a firm is 7200 units. The minimum order size stipulated by the supplier is 9000 units for utilizing a cash discount on the purchase price. The annual usage of the material in units is 80,000 and the cost per

The official key records '*'. This question is excluded from automatic grading because the source does not supply an unambiguous valid choice. Official source note: None of the option is correct. The correct answer is ₹ 222.22 or ₹ 300 [if we break the number of orders in fraction then in initial case it is 11.11 orders and ordering cost is ₹ 1111.11 but in later case it is 8.89 orders and ordering cost is ₹ 888.89. The difference of both is ₹ 222.22. Alternatively, if we ignore the fractions then in iniital case it is 12 orders and ordering cost is ₹ 1200 but in later case it is 9 orders and ₹ 900 is the ordering cost. Hence, the difference of the two is ₹ 300].