Question

Khuzawayo Construction a local sub-contractor expects to use 19 675 pockets of cement for 2021. Carrying costs are R 6.25 per unit and order costs are R 43.55. The organization works 315 Days per year. Determine the number of orders per year.

Answer 1

EOQ=$√(2×Co×D)÷Ch$

EOQ =√(2×19675×43.33)÷6.25

EOQ =√(1713692.5)÷6.25

EOQ=√274190.8

EOQ=523.6

No of orders= 19675÷523.6

No of orders = 37.55

Ans= 38 orders