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

Correct Answer: $$\sqrt {\frac{{2{\text{AP}}}}{{\text{C}}}} $$

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 $$\sqrt {\frac{{2{\text{AP}}}}{{\text{C}}}} .$$
Bissoy MCQ
#Mechanical Engineering #Industrial Engineering And Production Management

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