Question
The Wood Furniture company produces a specialty wood furniture product, and has the following information available concerning its inventory items: Relevant ordering costs per purchase
The Wood Furniture company produces a specialty wood furniture product, and has the following information available concerning its inventory items: Relevant ordering costs per purchase order $300 Relevant carrying costs per year: Required annual return on investment 10% Required other costs per year $2.80 Annual demand is 20,000 packages per year. The purchase price per package is $32. What are the total relevant costs, assuming the quantity ordered equals 1,000 units?
Somebody said this is missing data or format and this question posted is formatted entirely correct. The answer is 9,000 and I kept getting 6,000 if you cannot do it do not post its posted incorrect cause it isn't. I simply need to know why its 9,000. I know it has to do with the EOQ, but I can't quite figure out the last few steps. Thanks so much!
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