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Dear Tutor,
On the December 10 exam question 3 part a calculating the cost of current ordering policy is fine.
However when i come to calculate the cost of the ordering policy using the EOQ model i can not understand why i am using 2 or the 0.5 in the calculation to determine order size. The answer says (2x 400 x 160000/5.12)to the power of 0.5Where has the 2 and the 0.5 come from. Sorry if this is obvious.
Thank you in advance for your help.
VictoriaThe formula on the formula sheet for the EOQ is that it is equal to:
square root of ((2 x D x Co) / Ch )
2 is in the formula.
Another way of writing “square root” is to write is as “to the power 0.5” (but you do not have to write it like that in the exam).I do suggest that you watch our free lectures – they are a complete course for F9 and cover everything needed to be able to pass the exam well. (Although you will see that for inventory control it directs you to the Paper F2 lectures because this topic is revision from F2).
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