A manufacturing company places a semi-annual order of 24,000units at a price of $20 per unit. Its carrying cost is 15% and theorder cost is $12 per order.Required:1. What is the most economical order quantity?2. How many orders need to be placed?

Given: Semi-Annual orders =24000 units The total order quantity per year (A)=24000*2=48000 units…

Answered: A manufacturing company places a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

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?