Question
1. ABC company makes 27 orders of chairs in a year and orders 189 chairs each time. The fixed order costs are $467.34 per order
1. ABC company makes 27 orders of chairs in a year and orders 189 chairs each time. The fixed order costs are $467.34 per order and the carrying cost per unit is $31.97. The chairs are sold out before they are restocked. What are the carrying costs if the company orders the optimal quantity (Economic Order Quantity)?
2. XYZ is a retailer and sells 120,000 units per year. It purchases from a single supplier. Fixed cost per order is $860 and carrying cost is $12 per unit.
Suppose XYZ orders 5,000 units per order from the supplier. What are the total costs?
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