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JAZ Medical Supplies is implementing a new economic order quality (EOQ) inventory-control system and needs a good estimate of the cost to process a purchase
JAZ Medical Supplies is implementing a new economic order quality (EOQ) inventory-control system and needs a good estimate of the cost to process a purchase order (PO); i.e, the order cost C0. It takes six total labor hours to process a PO. The average number of SKUs on a PO is six. The average wage for people working in the purchasing department is $20 per hour plus employee benefits of $3 per hour. Fixed costs for the purchasing department are $270,000 per year assuming 1,260 hours per employee per year workweek. Given this information, what is a good estimate of C0 per SKU to use in an EOQ model? Round your answer to the nearest dollar. $ per SKU
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