Question 1
Sunrise Foods Pvt. Ltd. is a packaged snacks manufacturer located in Pune. The company uses a special type of corn starch as its key raw material for making chips. The production runs throughout the year, and maintaining a steady supply of raw materials is critical. After reviewing the last year’s consumption pattern, the Operations Manager found the following data: • The company uses 24,000 kg of corn starch annually. • The ordering cost (includes transportation, paperwork, inspection) is ₹250 per order. • The annual holding cost (storage, insurance, spoilage risk) is ₹4 per kg per year. • Corn starch is highly stable and does not deteriorate quickly.[Assume 52 weeks in an year] Based on the above data, answer the given subquestions.
What is the Economic Order Quantity (EOQ) in KG/order
