39. The Milling Corporation has developed a new type of widget. The local distributor expects to increase his sales by 20% over the past year due to this new development. Last year's sales were $600,000, at a selling price of $100 per unit. A safety stock of 23 units has eliminates stockouts. The carrying costs are $5.00. The manager would like to cut costs as much as possible and comes to get your advice for the economic ordering quantity. How much should he order? A) 100 units. B) 155 units. C) 50 units. D) 490 units.
39. The Milling Corporation has developed a new type of widget. The local distributor expects to increase his sales by 20% over the past year due to this new development. Last year's sales were $600,000, at a selling price of $100 per unit. A safety stock of 23 units has eliminates stockouts. The carrying costs are $5.00. The manager would like to cut costs as much as possible and comes to get your advice for the economic ordering quantity. How much should he order? A) 100 units. B) 155 units. C) 50 units. D) 490 units.
Chapter21: Risk Management
Section: Chapter Questions
Problem 5P
Question
![39.
The Milling Corporation has developed a new type
of widget. The local distributor expects to
increase his sales by 20% over the past year due to
this new development. Last year's sales were
$600,000, at a selling price of $100 per unit. A
safety stock of 23 units has eliminates stockouts.
The carrying costs are $5.00. The manager would
like to cut costs as much as possible and comes to
get your advice for the economic ordering
quantity. How much should he order?
A)
100 units.
B)
155 units.
C)
50 units.
D)
490 units.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F18d91ae7-dbe9-4fc8-a3e7-dc39d2304d04%2F9f0b277b-956b-4ac5-9f4b-1497cb6dc9a1%2Ftl22bu_processed.jpeg&w=3840&q=75)
Transcribed Image Text:39.
The Milling Corporation has developed a new type
of widget. The local distributor expects to
increase his sales by 20% over the past year due to
this new development. Last year's sales were
$600,000, at a selling price of $100 per unit. A
safety stock of 23 units has eliminates stockouts.
The carrying costs are $5.00. The manager would
like to cut costs as much as possible and comes to
get your advice for the economic ordering
quantity. How much should he order?
A)
100 units.
B)
155 units.
C)
50 units.
D)
490 units.
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