The graph below represents annual holding, ordering, and total costs versus order size (Q). The vertical line at the point labeled "A" passes through the intersection of the blue and red line. The annual demand is 12,000 units, with 18% annual interest charged to cover the cost of holding inventory. The cost of each item is $50, and the cost to cover shipping and paperwork is $1500. The value at A = ? units. Round to the nearest integer. The horizontal line at "B" passes through the minimum point on the green curve. The value at that point would be B = ? Round to the nearest integer. (Do NOT include Item Purchase Costs, but DO include Setup Costs plus Holding Costs).
The graph below represents annual holding, ordering, and total costs versus order size (Q). The vertical line at the point labeled "A" passes through the intersection of the blue and red line. The annual demand is 12,000 units, with 18% annual interest charged to cover the cost of holding inventory. The cost of each item is $50, and the cost to cover shipping and paperwork is $1500. The value at A = ? units. Round to the nearest integer. The horizontal line at "B" passes through the minimum point on the green curve. The value at that point would be B = ? Round to the nearest integer. (Do NOT include Item Purchase Costs, but DO include Setup Costs plus Holding Costs).
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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The graph below represents annual holding, ordering, and total costs versus order size (Q). The vertical line at the point labeled "A" passes through the intersection of the blue and red line. The annual demand is 12,000 units, with 18% annual interest charged to cover the cost of holding inventory. The cost of each item is $50, and the cost to cover shipping and paperwork is $1500.
The value at A = ? units. Round to the nearest integer.
The horizontal line at "B" passes through the minimum point on the green curve. The value at that point would be B = ? Round to the nearest integer.
(Do NOT include Item Purchase Costs, but DO include Setup Costs plus Holding Costs).
Transcribed Image Text:B
A
Order Size (Q)
»Annual Ordering Cost
-Annual holding cost
Total Annual Cost
Annual Cost (Dollars)
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