PLEASE TELL ME THE DERRIVATION OF FORMULA OF EOQ

Please do not type in capital letters. The derivation is not in the syllabus - it involves differentiating which cannot be asked in ACCA exams. I assume that you know how to differentiate (if not then I am certainly not going to teach you on here :-) ) If the order quantity is Q, then (using the same symbols as the formula does): the order cost per year is D/Q x Co The holding cost per year is Q/2 x Ch So the total cost is (D/Q x Co) + (Q/2 x Ch) For minimum total cost, you differentiate with respect to Q, and make equal to zero. Then you will have the formula.

Thank you very much, sir.

You are welcome :-)