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 $$\sqrt {\frac{{2{\text{AP}}}}{{\text{C}}}} .$$This Question Belongs to Mechanical Engineering >> Industrial Engineering And Production Management
it should be (2AP/C)^0.5