Discussion
Which one of the following is not part of calculation of EOQ ?
Answer: D
The item not used in calculating EOQ is the number of orders (N).
The economic order quantity balances ordering and carrying costs:
\[ EOQ = \sqrt{\frac{2AO}{C}} \]
where A is the annual requirement, O the cost per order and C the carrying cost per unit per year. The number of orders is an output of the calculation, found afterwards as A divided by EOQ, not an input to it.
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