ABC plc uses 1,800 units of material each year. The cost of placing an order is £2 and the holding cost per unit of inventory is £0.50 pa. The batch size at which inventory costs will be minimised is equal to: A. 14400 B. 120 C. 60 D. 1,800

ABC plc uses 1,800 units of material each year. The cost of placing an order is £2 and the holding cost per unit of inventory is £0.50 pa. The batch size at which inventory costs will be minimised is equal to: A. 14400 B. 120 C. 60 D. 1,800

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 8E: Melchar Company uses 78,125 pounds of oats each year. The cost of placing an order is 18, and the...

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Question

ABC plc uses 1,800 units of material each year. The cost of placing an order is £2 and the holding cost per unit of inventory is £0.50 pa.

The batch size at which inventory costs will be minimised is equal to:

A. 14400

B. 120

C. 60

D. 1,800

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