Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

tem X is a standard item stocked in a company's inventory of component parts. Each year the firm, on a random basis, uses about 1

tem X is a standard item stocked in a company's inventory of component parts. Each year the firm, on a random basis, uses about 1,600 of item X, which costs $25 each. Storage costs, which include insurance and cost of capital, amount to $6 per unit of average inventory. Every time an order is placed for more of item X, it costs $12.
Whenever item X is ordered, what should the order size be?
Note: Round your answer to the nearest whole number.
What is the annual cost for ordering item X?
Note: Round your order quantity to the nearest whole number and your final answer to 2 decimal places.
What is the annual cost for storing item X?
Note: Round your order quantity to the nearest whole number and your final answer to 2 decimal places.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Understanding And Managing Public Organizations

Authors: Hal G. Rainey

5th Edition

9781118583715

More Books

Students also viewed these General Management questions