$2$

$1$ point

Suppose you purchase a part from a supplier for a unit cost of $$4$ with which you assemble red widgets. On average, you use $50,000$ units of this part each year. Every time you order this particular part, you incur a sizable ordering cost of $$800$ regardless of the order size. Your cost of capital is $20\%$ per year.

How many parts should you purchase each time you place an order?

hint: use EOQ formula.

$7,500$ units

$12,000$ units

$10,000$ units

$12,500$ units

$3$

$1$ point

Suppose you purchase a part from a supplier for a unit cost of $$4$ with which you assemble red widgets. On average, you use $50,000$ units of this part each year. Every time you order this particular part, you incur a sizable ordering cost df ${?}_4$$$800$ regardless of the order size. Your cost of capital is $20\%$ per year.

To satisfy annual demand, how many times per year will you place orders for this part if your order size is $10,000$ units?

hint: consider the relation between order size, annual demand, and number of orders

$10$ times per year

$5$ times per year

$4$ times per year

$6$ times per year