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- This topic has 3 replies, 2 voices, and was last updated 2 years ago by
John Moffat.
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- May 21, 2022 at 11:15 am #656124
Sir in part A of this question they have taken holding cost per unit of 0.21 whereas it should have been 0.63 according to me and you as well(you had cleared a student’s doubt in previous forum)
My question is by using 0.63 i am getting a different answer than their solution..I am getting
A (i) Holding cost = 62500*0.63= 39375
ordering =3124
Total = 42399A (ii) EOQ = 34641 units
Holding cost= ordering cost=10911
Total = 21822
Therefore saving = 20577Their saving = 17199
A (iii) Holding cost =0.63*125000= 78750
Ordering cost =6*252 = 1512
Total cost = 80262Increase in annual holding and ordering cost= 80262- 42399 = 37863
Discount benefit = 1.5m*14*0.5% = 105000
Saving = 105000-37863 = 67137Their saving=67399
Are my answers correct?
Kindly tell sir..Thanks a lot for ur helpMay 22, 2022 at 7:57 am #656160Your answer looks to be correct. 🙂
May 22, 2022 at 11:40 am #656177Thank you sir!
May 22, 2022 at 4:32 pm #656195You are welcome 🙂
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