A company manufactures 5,000 units of a product per month. The cost of placing an order is ₹ 100. The purchase price of the raw material is ₹ 10 per kg. The average consumption of raw material is 275 kg per week. The carrying cost of inventory is 20% per annum. The economic order quantity is___

Q. A company manufactures 5,000 units of a product per month. The cost of placing an order is ₹ 100. The purchase price of the raw material is ₹ 10 per kg. The average consumption of raw material is 275 kg per week. The carrying cost of inventory is 20% per annum. The economic order quantity is___

A.            1,196 kg

B.            707 kg

C.            2,449 kg

D.            2,400 kg

Answer: 1,196 kg