Find out the economic ordering quantity (E O Q) from the following particulars ?

Agree with answers logged so far.

EOQ = SQRT(2 X Annual usage X Order cost / Holding cost

SQRT (2 X5000 X50 / (10% X20))

EOQ =500

According to given data:

Annual Usage =5000 units

ordering cost   =50

Carrying Cost = Carrying cost % x Per Unit

carrying cost   =10% x20

Carrying Cost  =0.1 x20 =2

So, 

E.O.Q = √2 x annual requirement x ordering cost / carrying cost

E.O.Q = √2 x5000 x50 /2

 E.O.Q =500 Units

Economic Order Quantity is500 Units

=SQ ROOT of [2*5000*50/(20*0.10)]=500 units

Let us consider as follows

Annual usage:5000 units   =   U means Annual Sales.

Cost of material per unit: $20   = P means purchase price per unit.

 Cost of Placing and receiving one order: $50. =  F means Fixed cost per order.

Annual carrying cost of one unit:10% of inventory value = C means10% of inventory Value

The formula for  EOQ is as follows.                            

Formula =   Q =  \\\\/2 FU / PC

\\\\/ Means Square root.

So Q= \\\\/ ((2X50X5000) /  (20 x.10))

Q=500

Correct answer by All the peoples

agree with mr  Ani Kuriakose  Managing Partner 

I agree with all the answers

where :  S = Setup costs D = Demand rate P = Production cost I = Interest rate (considered an opportunity cost, so the risk-free rate can be used) 

Good answer by Mr Mir, thanks