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EOQ formula ? and tell me about that???
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Answer Posted / suman mohapatra
EOQ= ______
\|2CO/I.
C=consumption of the materials concerned in units during
the year.
O=costs of getting an item into the firm's inventory.
I=interest payments including variable costs to storing per
unit per yeari.e holding costs.
It is the quantity of material to be ordered at
one time.This qty. is fixed in such a manner as to minimise
the ordering and carrying cost.It gives maximum economy in
purchasing any materials and ultimately contributes towards
maintaining the material at optimum level and at minimum
cost.
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