Answer to PTP Intermediate Syllabus 2012 Jun2014 Set 1
(i) Compute the EOQ (ii) Advise whether the quantity discount offer can be accepted (Assume that the inventory carrying cost does not vary according to the discount policy) (iii) Would your advice differ if the company is offered 5% discount on -a single order? [4+3+3] Answer: (i) Formula for EOQ = Cost per unit x Storage and carrying cost rate
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