If A is the total items consumed per year, P is the procurement cost per order, and C is the annual inventory carrying cost per item, then the most economic ordering quantity is given by
A. $$\frac{{{\text{AP}}}}{{\text{C}}}$$
B. $$\frac{{2{\text{AP}}}}{{\text{C}}}$$
C. $$\sqrt {\frac{{2{\text{AP}}}}{{\text{C}}}} $$
D. $${\left( {\frac{{{\text{AP}}}}{{\text{C}}}} \right)^2}$$
Answer: Option C
Solution(By Examveda Team)
If A is the total items consumed per year, P is the procurement cost per order, and C is the annual inventory carrying cost per item, then the most economic ordering quantity is given by $$\sqrt {\frac{{2{\text{AP}}}}{{\text{C}}}} .$$Join The Discussion
Comments ( 1 )
Related Questions on Industrial Engineering and Production Management
The essential condition for the decompression of an activity is that
A. The project time should change due to decompression
B. After decompression the time of an activity invariably exceeds its normal time
C. An activity could be decompressed to the maximum extent of its normal time
D. None of the above
A. CAM < DAM
B. CAM > DAM
C. CAM = DAM
D. There is no such criterion
it should be (2AP/C)^0.5