MTH601 Solution Lectures 11-12 Updated

Solution 1:

Curve shows the inverse relation b/w the Order Quantity and Ordering cost. Since the ordering cost per unit item is inversely proportional to the quantity ordered, so it would be maximum whenever the ordered quantity will be minimum.

1. 60

2*80*600 0.60

16000 D units C C C

C D EOQ C

units

2*25*200

10000

0.5

int D units C C C Q t

C D EOQ Q C

Q t D Thus he should produce units of his product at erval of days