Question: Ev Aletleri Company uses electrical assemblies to produce an array of small appliances. One of its high cost / high volume assemblies, the X50, has
Ev Aletleri Company uses electrical assemblies to produce an array of small appliances. One of its high cost / high volume assemblies, the X50, has an estimated annual demand of 8,000 units. Company estimates the cost to place an order is $50, and the holding cost for each assembly is $20 per year. The
company operates 250 days per year.
The purchasing manager decides that, in order to save purchasing time, orders for the X50 will be placed every three months, or four times per year. How much does this approach cost Company in total annual holding and ordering costs (instead of Ev Aletleri Company ordering using the EOQ quantity)?
| A) | less than or equal to $10,000 |
| B) | greater than $14,000 but less than or equal to $18,000 |
| C) | greater than $10,000 but less than or equal to $14,000 |
| D) | ggreater than $20,000 |
| E) | greater than $18,000 but less than or equal to $20,000 |
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