Global Journal of Management and Business Research, F: Real Estate, Event and Tourism Management, Volume 23 Issue 3

iii. Holding Costs/Carrying Cost (H) The cost incurred for holding the volume of inventory and measured as entage of The unit cost of an item. Which includes − Capital Cost − Obsolescence Cost − Deterioration Cost − Taxes on Inventory − Insurance Cost − Storage and Handling Cost Annual Holding Cost = (Q/2) H Where Q=Lot size H=Holding cost per unit iv. Ordering Costs (S) It is the cost of ordering the item and securing its supply or receiving the item. Which includes − Buyer Time − Expense from raising the indent − Receipt and Inspection of Materials Annual Ordering Cost = (D/Q) S Where D = Annual Demand S = Fixed Ordering Cost Q= Lot Size v. Material Cost (C) Material cost is the cost of the material cost that is used to produce. Annual Material Cost = CD Where D = Annual Demand C= Material Cost per unit So, we can identify Total Annual Cost (TC) = Annual Material Cost+ Annual Ordering Cost+ Annual Holding Cost = CD + (D/Q) S + (Q/2) H On the basis of the following information, we can calculate the following  Optimal lot/order size  Cycle Inventory  Average Flow Time  Annual Holding Cost  Annual Ordering Cost  Annual Material Cost  Total Annual Cost  No. of orders per year vi. The EOQ Formula Where, D = Annual Demand S = Fixed Ordering Cost H = Holding Cost Fig. 13: EOQ Model Practices From the questionnaire survey in those five projects, we found that all projects have no practices of this tool. The order size of required materials in a construction project depends on project duration, Inventory Management Practices and Challenges in Mega Construction Projects in Bangladesh Global Journal of Management and Business Research ( F ) XXIII Issue III Version I Year 2023 32 © 2023 Global Journals EOQ= √ 2 × ×