Economic Order Quantity

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi, I wonder if anyone can help???

I am a bit confused on how to work out the economic order qantity. I can work out the formula ok but when I get to the end where you find out how many units or items are bought I get stuck.

Let me give you an example:

2*50*780/19.65 = 3969 = 63 Rolls (In this case I am working on rolls of wall paper).

What I can't understand is how you get 63 rolls what sum do I do to get there.

Very Confused!! :?

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Economic Order Quantity

    I'm not sure if this is answering your question, but you have to take the square root of the whole equation. So, the square root of 3969 is 63. If that's not what your question was, let me know and i'll have another think.
    xxxx
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Economic Order Quantity

    My tutor taught us a really easy way of remembering the formula:

    2 x cod and ch (chips) (square root)

    2 x Cost Of ordering + Annual Demand devided by Cost of Holding (CH. Square root.

    I hope this helps
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Economic Order Quantity

    Thanks Guys I don't know why I didn't think of that, things are a lot clearer now. Sometimes you can't see an answer for looking. xx

    :lol:
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Economic Order Quantity

    If EOQ is tested in the ECR exam (while Les Nightingale is examiner) I will be shocked.

    It is not even in the standards for the unit.

    I teach it to HND students but not to AAT students.

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