Inventory Control (part 3) – Economic Batch Quantity – ACCA Management Accounting (MA)
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The denominator in the formula is 3(1 – 50,000/500,000) = 3 (1 – 0.1) =3 x 0.9 = 2.7
The numerator is 2 x 200 x 50,000 = 20,000,000
20,000,000 / 2.7 = 7407407
The square root of 7407407 = 2722
I can’t lie, I was following until we got to this whole 0.9 thing, every time i input the formula i get a number closer to 2449,
the forumla clearly states 3 X 0.9 or 3 x 1 – 50000/500000 and when you input that you get 2449 however you have wrote X yet said divide whilst putting in the calulator without explaining if thats correct so i now dont know if your wrong the formulas wrong or what