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5. The following information are given: Optimal production run in units Average inventory in units Number of production runs Cost per unit produced Desired annual
5. The following information are given: Optimal production run in units Average inventory in units Number of production runs Cost per unit produced Desired annual return on inventory investment Set-up costs per production run 2,000 1,000 5 P75 18% P5,000 If the units will be required evenly throughout the year, the total annual relevant costs using the economic-order-quantity approach is 10. ABC Company finances all of its seasonal inventory needs from the local bank at an effective interest cost of 9%. The firm's supplier promises to extend trade credit on terms that will match the 9% bank credit rate. What terms would the supplier have to offer (approximately)
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