Question
Delph manufacturing Company orders electronic parts from a supplier for $40 per box. The company uses 2000 boxes per year. Ordering costs are $200 and
Delph manufacturing Company orders electronic parts from a supplier for $40 per box. The company uses 2000 boxes per year. Ordering costs are $200 and carrying cost is 10% of the price of a box.
How much is the total ordering cost per year if Delph minimizes total cost?
Step by Step Solution
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Step: 1
To minimize the total cost you can use the Economic Order Quantity EOQ model which helps determine t...
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Intermediate Financial Management
Authors: Eugene F. Brigham, Phillip R. Daves
11th edition
978-1111530266
