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) $${\left( {\frac{{{\text{AP}}}}{{\text{C}}}} \right)^2}$$

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Correct Answer: Option C

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 $$\sqrt {\frac{{2{\text{AP}}}}{{\text{C}}}} .$$

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KARTHIKEYAN GURU 6 years ago

it should be (2AP/C)^0.5

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If A is the total items consumed per year P is...

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

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