---
title: "ABC categories and EOQ of cement"
subject: "Construction Management"
chapter: 3
key: "semester_8/construction_management:abc-eoq-cement-2070"
source: https://www.bctengineer.com/q/semester_8/construction_management/abc-eoq-cement-2070
site: BCT Engineering
---

# ABC categories and EOQ of cement

Construction Management · Chapter 3: Planning Construction Material

- Asked in: 2070 Magh, 3+3 marks
- Video: [Inventory Control Technique: ABC Analysis](https://www.youtube.com/watch?v=fzY_wPtPkbM) — WIT Solapur - Professional Learning Community
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_8/construction_management/abc-eoq-cement-2070
- Whole chapter: https://www.bctengineer.com/md/semester_8/construction_management/chapter-3

## Question

Define A, B and C category of materials. Calculate Economic Order Quantity of Cement with following details; Total Quantity = 12000 bags; Ci = 15%, Co = 10000; P = 750 Rs. per bag.

## Short answer

ABC classification: A items (few, high value) strict control, B moderate, C (many, low value) simple control. Carrying cost =15% of Rs 750 = Rs 112.5/bag/year. EOQ = sqrt(2*12000*10000/112.5) ≈ 1,461 bags.

## Answer

#### A, B and C categories
Materials are classified by annual consumption value (quantity x rate):
- **A:** few items (about 10-20%) forming about 70-80% of total value (cement, steel); strict control.
- **B:** about 30% of items with about 15-20% of value (bricks, aggregate, tiles); moderate control.
- **C:** many items (50-60%) but only 5-10% of value (nails, binding wire, small tools); simple control.

#### EOQ of cement
$D = 12000$ bags, $C_o = $ Rs 10,000, $P = $ Rs 750/bag, $C_i = 15\%$, so carrying cost $C_h = 0.15 \times 750 = $ Rs 112.5 per bag per year.

$$
EOQ = \sqrt{\frac{2 \times 12000 \times 10000}{112.5}} = 1460.6\ \text{bags}
$$

Orders per year = 12000/1460.6 = 8.2.

**Answer: EOQ $\approx$ 1,461 bags.**

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. Class B materials are typically:
   A. 10-20% of items with 70-80% of value
   B. about 30% of items with 15-20% of value
   C. 50-60% of items with 5-10% of value
   D. all steel
   Answer: B. B items need moderate control; examples are bricks, aggregate and tiles. (Key point: Class B)

2. With Ci = 15% and P = Rs 750, Ch is:
   A. Rs 15
   B. Rs 112.5
   C. Rs 11.25
   D. Rs 750
   Answer: B. 0.15 x 750 = Rs 112.5 per bag per year. (Key point: Carrying cost)

3. EOQ for D = 12000, Co = 10000, Ch = 112.5 is about:
   A. 730 bags
   B. 2,921 bags
   C. 1,461 bags
   D. 12,000 bags
   Answer: C. sqrt(2 x 12000 x 10000 / 112.5) = 1460.6 bags. (Key point: EOQ result)

## Related in Construction Management

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