A manufacturing company places a semi-annual order of 24,000units at a price of $20 per unit. Its carrying cost is 15% and theorder cost is $12 per order.Required:1. What is the most economical order quantity?2. How many orders need to be placed?

Given: Semi-Annual orders =24000 units The total order quantity per year (A)=24000*2=48000 units…

Answered: A manufacturing company places a…

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Proudction Costs

Section: Chapter Questions

Problem 8SQP

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A manufacturing company places a semi-annual order of 24,000 units at a price of $20 per unit. Its carrying cost is 15% and the order cost is $12 per order. Required: 1. What is the most economical order quantity? 2. How many orders need to be placed?