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Costing- Material

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(Querist)
08 April 2011 If Annual Demand and Normal usage are both given in the question,to calculate EOQ or Reorder Quantity, which one should be taken?
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CA Ganpat Singh Rajpurohit

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CA Ganpat Singh Rajpurohit (Expert)
08 April 2011 Annual Demand should be taken.
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medini

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medini (Querist)
08 April 2011 Thank You Sir, But in this problem, i am not getting Ordering cost=Carrying cost @ EOQ when I take Annual Demand. But i get it at normal Usage. Here is the Question:
M/s Tubes Ltd. manufactures TV tubes.
The market demand is 2000 per month.
Ordering Cost 100 per order,inventory carrying cost 20% p.a.
Cost of tubes 500/tube
Normal usage 100 tubes/week
Minimum Usage 50/week
Maximum Usage 200/week
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