JAZ Medical Supplies is implementing a new economic order


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JAZ Medical Supplies is implementing a new economic order quality (EOQ) inventory-control system and needs a good estimate of the cost to process a purchase order (PO); i.e, the order cost Co. It takes six total labor hours to process a PO. The average number of SKUS on a PO is six. The average wage for people working in the purchasing department is $33 per hour plus employee benefits of $5 per hour. Fixed costs for the purchasing department are $280,000 per year assuming 1,728 hours per employee per year workweek. Given this information, what is a good estimate of Co per SKU to use in an EOQ model? Round your answer to the nearest dollar. $ per SKU

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