Annual Demand = 10,000 units Days per year considered in average daily demand = 365 Cost to place an order = $10 Holding cost per unit per year = 0.01% of cost per unit Lead time = 3 days Cost per unit = $15 Determine the economic order quantity and the reorder point. Also find the Annual Ordering and Holding Cost. State some significance of the obtained results.

Annual Demand = 10,000 units Days per year considered in average daily demand = 365 Cost to place an order = $10 Holding cost per unit per year = 0.01% of cost per unit Lead time = 3 days Cost per unit = $15 Determine the economic order quantity and the reorder point. Also find the Annual Ordering and Holding Cost. State some significance of the obtained results.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 3DQ: Suppose a company finds that shipping cost is 3,560 each month plus 6.70 per package shipped. What...

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If D = 8,400 per month, S = $43 per order, and H = $1.50 per unit per month, a) What is the economic order quantity? The EOQ is units (round your response to the nearest whole number).
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