A company has annual demand for its product of 800,000 units. Each unit costs $10. Ordering costs are $400 per order and the annual holding cost per unit is $0.85.A 0.65% discount is available on all orders of at least 15,000 units and a 0.75% discount for orders of at least 35,000 units. Required:- Calculate the optimum order level to reduce total inventory costs
A company has annual demand for its product of 800,000 units. Each unit costs $10. Ordering costs are $400 per order and the annual holding cost per unit is $0.85.A 0.65% discount is available on all orders of at least 15,000 units and a 0.75% discount for orders of at least 35,000 units. Required:- Calculate the optimum order level to reduce total inventory costs
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints
Section: Chapter Questions
Problem 6E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...
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A company has annual demand for its product of 800,000 units. Each
unit costs $10. Ordering costs are $400 per order and the annual holding
cost per unit is $0.85.A 0.65% discount is available on all orders of at
least 15,000 units and a 0.75% discount for orders of at least 35,000
units.
Required:-
Calculate the optimum order level to reduce total inventory costs
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