What is the most economical number of units to order?Annual requirement = 48,000 units, Ordering cost = Rs.9 per order, Carrying cost = 15% of per-unit cost. Per unit cost = Rs.4 per unitOptions :1567150012001765

To determine the most economical number of units to order, we need to consider the annual requirement, ordering cost, carrying cost, and per-unit cost.

Given:

• Annual requirement = 48,000 units
• Ordering cost = Rs.9 per order
• Carrying cost = 15% of per-unit cost
• Per unit cost = Rs.4 per unit

To calculate the most economical number of units to order, we can use the Economic Order Quantity (EOQ) formula:

EOQ = √((2 * Annual requirement * Ordering cost) / Carrying cost)

Substituting the given values into the formula:

EOQ = √((2 * 48,000 * 9) / (0.15 * 4))

Simplifying the equation:

EOQ = √(86,400 / 0.6)

EOQ = √(144,000)

EOQ ≈ 379.473

Since we cannot order a fraction of a unit, we need to round up to the nearest whole number. Therefore, the most economical number of units to order is 380 units.

To determine the most economical number of units to order, we need to consider the annual requirement, ordering cost, carrying cost, and per-unit cost.

1. Calculate the total ordering cost:

   • Ordering cost per order = Rs.9
   • Number of orders = Annual requirement / Number of units per order
   • Number of units per order = Total units ordered / Number of orders
   • Total ordering cost = Number of orders * Ordering cost per order

2. Calculate the total carrying cost:

   • Per-unit cost = Rs.4
   • Carrying cost per unit = 15% of per-unit cost
   • Total carrying cost = Total units ordered * Carrying cost per unit

3. Calculate the total cost:

   • Total cost = Total ordering cost + Total carrying cost

4. Repeat steps 1-3 for each option provided:

   • Option 1: 1567 units
   • Option 2: 1500 units
   • Option 3: 1200 units
   • Option 4: 1765 units

5. Compare the total costs for each option and identify the option with the lowest total cost. This option represents the most economical number of units to order.

By following these steps, you can determine the most economical number of units to order based on the given information.

To determine the most economical number of units to order, we need to consider the annual requirement, ordering cost, carrying cost, and per-unit cost.

Given:

• Annual requirement = 48,000 units
• Ordering cost = Rs.9 per order
• Carrying cost = 15% of per-unit cost
• Per unit cost = Rs.4 per unit

To calculate the most economical number of units to order, we can use the Economic Order Quantity (EOQ) formula:

EOQ = √((2 * Annual requirement * Ordering cost) / Carrying cost)

Substituting the given values into the formula:

EOQ = √((2 * 48,000 * 9) / (0.15 * 4))

Simplifying the equation:

EOQ = √(86,400 / 0.6)

EOQ = √(144,000)

EOQ ≈ 379.473

Since we cannot order a fraction of a unit, we need to round up to the nearest whole number. Therefore, the most economical number of units to order is 380 units.