1

2

3

4

5

INPUT

Material

Management

Department

OUTPUT

Production

Department

6

7

8

9

10

11

12

13

Annual Carrying Cost = 10

100 X 59294 X

1

Or no.

14

SL NO. ORDERING NO

ANNUAL ORDERING COST

ANNUAL

CARRYING COST

TOTAL

INVENTORY COST

1 12 12 X 238 = 2856 494.11 3350.11

2 6 6 X 238 = 1428 988.23 2416.23

3 4 4 X 238 = 952 1482.35

2434.35

4 3 3 X 238 = 714 1976.47

2717.47

5 2 2 X 238 = 476 2964.7

3440.7

6 1 1 X 238 = 238 5929.4

6167.4

15

Annual ordering Cost

Ordering no

Co

st t

o O

rder

& C

arry

ing

EOQ

6

16

EOQ =

2 DS

H

D = Annual Demand/consumption

S = Annual ordering cost

H = Annual holding cost

(It include inventory carrying cost)

17

EOQ =

2 DS

H

EOQ =

2*59294 *238

988.23

5.38 ORDER

OR

6 ORDERS(Rounded off)

=

18

19

19