[amp_mcq option1=”100 units” option2=”200 units” option3=”300 units” option4=”400 units” correct=”option3″]
The economic order quantity (EOQ) is the order quantity that minimizes the total inventory costs. It is calculated as follows:
$EOQ = \sqrt{\frac{2DC}{h}}$
where:
- $D$ is the annual demand,
- $C$ is the order cost,
- $h$ is the holding cost per unit per year.
In this case, we have:
- $D = 4000$ units
- $C = 80$ rupees
- $h = 4$ rupees per unit per year.
Substituting these values into the formula, we get:
$EOQ = \sqrt{\frac{2 \times 4000 \times 80}{4}} = 200$ units.
Therefore, the economic order quantity is 200 units.
Option A is incorrect because it is less than the economic order quantity. Option B is incorrect because it is greater than the economic order quantity. Option C is incorrect because it is equal to the economic order quantity. Option D is incorrect because it is not a valid option.