Cost A/cs - EOQ

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Hi,


While computing EOQ, why do we muluiply Carrying cost with 1/2 in solving Q. I always forgot to divide it and my answer comes wrong ? What is the logic behind this ? Pl help...

Regards,

Patricia

Mumbai

 

Replies (4)

while computing EOQ we divide d quantity as we r assuming that quantity will remain half in godown and half at factory. and carrying cost is for d godown quantity only.

said by sathil is correct but the term is we have to take only average stock. That's why we are using 1/2.

manjkadan is correct and sathil is entirely wrong

anuj its a logic of taking average stock and if m worng then pls tell wats d logic of taking average stock . dude ur learning  formules and m giving d perfect logic


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