Question: ABC Inc. orders components for distribution at a monthly demand of 900 units. Holding costs are 15% of the unit cost of $23.75. The ordering
ABC Inc. orders components for distribution at a monthly demand of 900 units. Holding costs are 15% of the unit cost of $23.75. The ordering cost is $47.35. The company operates 240 days per year
a. If the company wishes to effectively procure these components, what would be the optional amount to order? [ Select ] ["250.67", "535.81", "1,825.78", "645.90", "572.08"]
b.. What is the average inventory? [ Select ] ["127.90", "314.64", "967.90", "544.97", "267.91"]
c. How many order cycles are there per year? [ Select ] ["27.89", "19.78", "15.78", "20.16", "30.10"]
d. What are the total cost of managing the inventory? $ [ Select ] ["$1,489.22", "$954.41", "$857.50", "$2,16724", "$1,908.82"]
e. What is the total cost, including the cost of the inventory? [ Select ] ["$225,600.90", "$258.408.82", "$346,567.25", "$312,856.57", "$324,672.00"]
f. What is ABC Inc. decided to order 600 components, what impact would it have on holding costs? [ Select ] ["there would be no impact on holding costs", "holding costs would increase by $114.34", "holding costs would increase by $35.90", "Ordering cost would remain the same in this scenario", "holding costs would decrease by $1,068.75"]
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
