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ABC company sells four products with IDs, A950, B958, C975, and D980. Each product has a order-up-to point (M) and on-hand inventory (H). Stated
ABC company sells four products with IDs, A950, B958, C975, and D980. Each product has a order-up-to point (M) and on-hand inventory (H). Stated mathematically, if Q is the amount we order, then Q-M-H (It is worth noting that when H=M, no order is placed). Each time a distinct component is ordered, it costs ABC $100 to process the order (Fixed Cost). If 80 or more units are ordered, there is a quantity discount of 5% on every unit purchased. on-hand inventory (H), cost per unit, and order-up-to point (M) for each product are given in the following Table. Component ID A950 B958 C975 D980 On-hand inventory (H) 20 35 5 90 order-up-to point (M) 80 100 150 90 90 $ $ 1A Cost per unit $2.50 $ 3.00 5.00 3.50 Which one indicates the total cost of ordering (Total cost = Fixed cost +Variable cost)? Note: Ignore the decimal value of your calculated answer. 2580 2120 875 1255 1175
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