The mechanical engineer at Pham Manufacturing has developed a new gearbox. Next year's sales are expected to be $70,000 at a selling price of $100 per unit. The manager would like to cut costs as much as possible and comes to you for advice.

Relevant cost information includes:

Warehouse space $3.00/unit;

Material handling expense $2.00/unit;

Insurance premium $1.00/unit;

Total ordering cost $150.00/per order

Question 4 (3 points)

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Ignore the information in the header: How many orders will be made per year in the situation where 2,000 units are sold monthly for $10 each and the ordering cost is $50 and the carrying cost is $4 per unit?

Question 4 options:

	31 orders per year
	9 orders per year
	28 orders per year
	98 orders per year