A firm consumes 90000 units of a certain item of raw material in its production process annually. It costs Rs. 3 per unit, the cost per purchase order is Rs. 300 and the inventory carrying cost is 20% per year. What is the EOQ?

A firm consumes 90000 units of a certain item of raw material in its p

1.	A firm consumes 90000 units of a certain item of raw material in its production process annually. It costs Rs. 3 per unit, the cost per purchase order is Rs. 300 and the inventory carrying cost is 20% per year. What is the EOQ?
A.	9470 units
B.	9487 units
C.	9480 units
D.	9840 units
Answer» C. 9480 units

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A firm consumes 90000 units of a certain item of raw material in its production process annually. It costs Rs. 3 per unit, the cost per purchase order is Rs. 300 and the inventory carrying cost is 20% per year. What is the EOQ?

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