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A manufacturing company produces a product. Over the year, they will need to purchase 18,000 units of a specialized component at a cost of $60
- A manufacturing company produces a product. Over the year, they will need to purchase 18,000 units of a specialized component at a cost of $60 each. It costs $150 to make a purchase. As well, the relevant carrying costs (material handling, shrinkage, etc) cost is $6 per unit per year. The company requires a 15% annual rate of return on investment. How many units should they order at a time?
- 600 units
- 667 units
- 800 units
- 933 units
- 967 units
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