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The mechanical engineer at Robinson Manufacturing has developed a new gearbox. The local distributor expects to increase his sales by 30% over the past year
The mechanical engineer at Robinson Manufacturing has developed a new gearbox. The local distributor expects to increase his sales by 30% over the past year due to this new development. Last year's sales were $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 |
What is the economic order quantity?
a.
187 units
b.
213 units
c.
522 units
d.
174 units
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