Question: The purchasing manager for a job shop must decide whether to stock a particular material or just order it as needed for custom jobs. To

The purchasing manager for a job shop must decide whether to stock a particular material or just order it as needed for custom jobs. To stock the items the inventory status would have to be checked once a week at a cost of $500 annually. The cost to place an order is estimated at $125. Irregular orders placed for specific jobs would require an additional $85 delivery charge. The company would have to place approximately 20 orders per year. Demand for the $8 item is 2,300 The purchasing manager for a job shop must decide whether to stock units per year. The holding cost rate is 40%. Should the manager decide to stock the item (show your process, solution, and decision)?

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