ördering per A new purchasing agent has been hired by the company who wants to start using the economic-order- quantity method and its supporting decision elements. She has gathered the following information: Annual demand in units Lead time, in days Ordering costs Insurance and handling costs Purchase price per unit Return on cash investment 20,800| $22 $7 $15 15% Required a) What is the economic order quantity for Andrews Company? b) How many deliveries will be made during each year at the recommended economic order quantity?
ördering per A new purchasing agent has been hired by the company who wants to start using the economic-order- quantity method and its supporting decision elements. She has gathered the following information: Annual demand in units Lead time, in days Ordering costs Insurance and handling costs Purchase price per unit Return on cash investment 20,800| $22 $7 $15 15% Required a) What is the economic order quantity for Andrews Company? b) How many deliveries will be made during each year at the recommended economic order quantity?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![For supply item ABC, Andrews Company has been ordering 400 units per week. A new
purchasing agent has been hired by the company who wants to start using the economic-order-
quantity method and its supporting decision elements. She has gathered the following
information:
Annual demand in units
Lead time, in days
Ordering costs
Insurance and handling costs
Purchase price per unit
Return on cash investment
20,800
5
$22
$7
$15
15%
Required
a) What is the economic order quantity for Andrews Company?
b) How many deliveries will be made during each year at the recommended economic order
quantity?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd3277493-b245-4dd7-95b1-8294531609ae%2F6b108db4-bbd9-4e3e-ba6e-e7442d86313e%2Frjxftwa_processed.png&w=3840&q=75)
Transcribed Image Text:For supply item ABC, Andrews Company has been ordering 400 units per week. A new
purchasing agent has been hired by the company who wants to start using the economic-order-
quantity method and its supporting decision elements. She has gathered the following
information:
Annual demand in units
Lead time, in days
Ordering costs
Insurance and handling costs
Purchase price per unit
Return on cash investment
20,800
5
$22
$7
$15
15%
Required
a) What is the economic order quantity for Andrews Company?
b) How many deliveries will be made during each year at the recommended economic order
quantity?
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