20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for December 2025 exams.
Get your discount code >>

EOQ

This topic has 3 replies, 3 voices, and was last updated 10 years ago by John Moffat.

Viewing 4 posts - 1 through 4 (of 4 total)

Author
Posts
February 18, 2015 at 11:17 pm #229108
kssoni
Member
- Topics: 1
- Replies: 2
how to find EOQ if there is lead time. There was question on mock exam.
demand: 7500 units per month
unit cost $5
ordering cost $100 per order
holding cost is 10% of purchase price per year
Lead time 30 days between placing and receiving order.
February 19, 2015 at 8:46 am #229145
John Moffat
Keymaster
- Topics: 57
- Replies: 54760
The lead time is not relevant for calculating the EOQ. (It is the time between placing the order and receiving the delivery – it does not affect the quantity ordered, but simply means placing the order before running out of inventory.)
March 18, 2015 at 8:30 pm #233218
Jess
Member
- Topics: 1
- Replies: 3
sorry to hi-jack this post, but I’m struggling to work out the EOQ on this question, the answer is 6,000 but for some reason I cannot get there!
Can you help at all?
March 18, 2015 at 8:39 pm #233220
John Moffat
Keymaster
- Topics: 57
- Replies: 54760
The demand: D = 7,500 x 12 = 90,000
The ordering cost = Co = 100
The holding cost = Ch = 10% x 5 = 0.50
If you put those figures in the formula, then you will get 6,000 🙂
Author
Posts

Viewing 4 posts - 1 through 4 (of 4 total)

You must be logged in to reply to this topic.