A manufacturing company places a semi-annual order of 24,000 units at a price of $20 per unit. Its carrying cost is 15% and the order cost is $12 per order. Required: 1. What is the most economical order quantity? 2. How many orders need to be placed?
A manufacturing company places a semi-annual order of 24,000 units at a price of $20 per unit. Its carrying cost is 15% and the order cost is $12 per order. Required: 1. What is the most economical order quantity? 2. How many orders need to be placed?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![A manufacturing company places a semi-annual order of 24,000
units at a price of $20 per unit. Its carrying cost is 15% and the
order cost is $12 per order.
Required:
1. What is the most economical order quantity?
2. How many orders need to be placed?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff1f2c2c7-a687-48df-bab2-ed2241810605%2F17b71023-67a3-4e0f-a909-5ad4effc8362%2Fz5sb0qh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A manufacturing company places a semi-annual order of 24,000
units at a price of $20 per unit. Its carrying cost is 15% and the
order cost is $12 per order.
Required:
1. What is the most economical order quantity?
2. How many orders need to be placed?
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