{"id":51158,"date":"2024-04-15T23:20:46","date_gmt":"2024-04-15T23:20:46","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=51158"},"modified":"2024-04-15T23:20:46","modified_gmt":"2024-04-15T23:20:46","slug":"annual-usage-is-6000-units-rs-20-per-unit-cost-of-placing-an-order-is-rs-60-and-annual-carrying-cost-of-one-unit-is-10-of-inventory-value-eoq-__________","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/annual-usage-is-6000-units-rs-20-per-unit-cost-of-placing-an-order-is-rs-60-and-annual-carrying-cost-of-one-unit-is-10-of-inventory-value-eoq-__________\/","title":{"rendered":"Annual usage is 6000 units @ Rs 20 per unit Cost of placing an order is Rs 60 and annual carrying cost of one unit is 10% of inventory value EOQ = __________."},"content":{"rendered":"<p>[amp_mcq option1=&#8221;600 units&#8221; option2=&#8221;750 units&#8221; option3=&#8221;1200 units&#8221; option4=&#8221;1250 units&#8221; correct=&#8221;option3&#8243;]<!--more--><\/p>\n<p>The correct answer is C. 1200 units.<\/p>\n<p>The economic order quantity (EOQ) is the optimal quantity of an item to order at a time in order to minimize the total inventory costs. It is calculated by the following formula:<\/p>\n<p>EOQ = \u00e2\u0088\u009a(2<em>D<\/em>C)\/H<\/p>\n<p>where:<\/p>\n<ul>\n<li>D = annual demand in units<\/li>\n<li>C = cost of placing an order<\/li>\n<li>H = annual carrying cost per unit<\/li>\n<\/ul>\n<p>In this case, we have:<\/p>\n<ul>\n<li>D = 6000 units<\/li>\n<li>C = 60<\/li>\n<li>H = 0.1*20 = 2<\/li>\n<\/ul>\n<p>Substituting these values into the formula, we get:<\/p>\n<p>EOQ = \u00e2\u0088\u009a(2<em>6000<\/em>60)\/2 = 1200 units<\/p>\n<p>The other options are incorrect because they do not minimize the total inventory costs. For example, option A (600 units) would result in higher ordering costs, while option B (750 units) would result in higher carrying costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;600 units&#8221; option2=&#8221;750 units&#8221; option3=&#8221;1200 units&#8221; option4=&#8221;1250 units&#8221; correct=&#8221;option3&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"class_list":["post-51158","post","type-post","status-publish","format-standard","hentry","category-costing","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Annual usage is 6000 units @ Rs 20 per unit Cost of placing an order is Rs 60 and annual carrying cost of one unit is 10% of inventory value EOQ = __________.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/annual-usage-is-6000-units-rs-20-per-unit-cost-of-placing-an-order-is-rs-60-and-annual-carrying-cost-of-one-unit-is-10-of-inventory-value-eoq-__________\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Annual usage is 6000 units @ Rs 20 per unit Cost of placing an order is Rs 60 and annual carrying cost of one unit is 10% of inventory value EOQ = __________.\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;600 units&#8221; 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