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Annual demand for your product is 50,000 units. Holding cost is 25% of the value of the item. The cost, per unit, is $5.00. It costs $200 to place an order.  This is a new supplier that you are thinking about buying from, and the catch is that you have to place a pretty big order in order to be able to buy from these people.  You have to buy at least 6,957 units every time. What are you total costs, (including the Cost of Goods), if you choose to buy from this supplie

Annual demand for your product is 50,000 units. Holding cost is 25% of the value of the item. The cost, per unit, is $5.00. It costs $200 to place an order.  This is a new supplier that you are thinking about buying from, and the catch is that you have to place a pretty big order in order to be able to buy from these people.  You have to buy at least 6,957 units every time. What are you total costs, (including the Cost of Goods), if you choose to buy from this supplie

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Annual demand for your product is 50,000 units. Holding cost is 25% of the value of the item. The cost, per unit, is $5.00. It costs $200 to place an order.  This is a new supplier that you are thinking about buying from, and the catch is that you have to place a pretty big order in order to be able to buy from these people.  You have to buy at least 6,957 units every time.

What are you total costs, (including the Cost of Goods), if you choose to buy from this supplier?

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