Economic Order Quantity (EOQ) is calculated as:
A) $ \sqrt{(2 x H x K) / A} $
B) $ \sqrt{(2 x A x K) / H} $
C) $ \sqrt{(2 x H x A) / K} $
D) $ \sqrt{\frac{H x A}{2} x K} $

Question

Quizplus · Accepted Answer

The formula for EOQ is $ \sqrt{(2 x A x K) / H} $, where:
- A is the annual demand
- K is the cost of placing an order
- H is the holding cost per unit per year
This formula is derived from the balance between the cost of holding inventory and the cost of placing orders. The optimal order quantity is the one that minimizes the total cost, which includes both holding costs and ordering costs. Option B is the correct formula that considers all these factors.

Economic Order Quantity (EOQ) Is Calculated As: A) (2xHxK)/A \sqrt{(2 x H x K) / A} (2xHxK)/A​

Economic Order Quantity (EOQ) Is Calculated As:
A) $\sqrt{(2 x H x K) / A}$