A company uses 1,500 units of Zeron per year. Each unit has an invoice cost of P222, including shipping costs. Because of the volatile nature of Zeron, it costs P860 for liability insurance on each shipment. The cost of carrying the inventory amount to P65 per item per year exclusive of a 20 percent cost of capital. Other order costs amount to P18 per order. At present, the company orders 250 units at a time.

What is the annual cost of the company's current order policy?

Answer rating: 100% (QA)

To calculate the annual cost of the companys current order policy we need to consider the various co... View the full answer