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Dear Sir,
I would be grateful if you helped clarify the answer for the following task. It is from BPP revision kit and I do not understand why they list the correct answer as D when, to my knowledge it is clearly B.
Thank you!Unit cost or raw material: $20
Usage per week: 250 units
Cost of ordering material, per order $400
Annual cost of holding inventory, as a % of cost 10%
Number of weeks in a year 48
What is EOQ to the nearest unit?
Answers:
A 316 units
B 693 units
C 1.549 units
D 2,191 unitsThe answer is D.here, ordering cost=400,D=12000(48*250),ch=2(10%of material cost).
Farzana: Please do not answer in this forum – it is Ask the Tutor, and you are not the tutor 🙂
NewAccountantInTown: Farzana is correct, and D is the correct answer. (I think what you did is take 250 x 48 as being 1,200, when it is actually 12,000)
Thank you very much for the answers! Ive recalculated it today and its is the correct answer.
Lesson learnt: don’t do equations late at night!
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