Question: Item X is a standard item stocked in a company s

Item X is a standard item stocked in a company’s inventory of component parts. Each year the Firm, on a random basis, uses about 2,000 of item X, which costs $ 25 each. Storage costs, which include insurance and cost of capital, amount to $ 5 per unit of average inventory. Every time an order is placed for more of item X, it costs $ 10.
a. Whenever item X is ordered, what should the order size be?
b. What is the annual cost for ordering item X?
c. What is the annual cost for storing item X?




Sale on SolutionInn
Sales10
Views530
Comments
  • CreatedApril 09, 2014
  • Files Included
Post your question
5000