Stocks of cement on a construction site are allowed to run down to a level of 3 tonnesbefore being replenished. Cement is used steadily at 50 tonnes per week. Cementcosts 15 Euro per tonne and the cost of storage and deterioration per week is 10% ofthe cement price. Each time cement is ordered, there is a cost of processing this orderof 1 Euro. How much cement should be ordered each time? What is the cost of ordering and storing the cement?
Stocks of cement on a construction site are allowed to run down to a level of 3 tonnesbefore being replenished. Cement is used steadily at 50 tonnes per week. Cementcosts 15 Euro per tonne and the cost of storage and deterioration per week is 10% ofthe cement price. Each time cement is ordered, there is a cost of processing this orderof 1 Euro. How much cement should be ordered each time? What is the cost of ordering and storing the cement?
Chapter1: Financial Statements And Business Decisions
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- Stocks of cement on a construction site are allowed to run down to a level of 3 tonnesbefore being replenished. Cement is used steadily at 50 tonnes per week. Cementcosts 15 Euro per tonne and the cost of storage and deterioration per week is 10% ofthe cement price. Each time cement is ordered, there is a cost of processing this orderof 1 Euro.
- How much cement should be ordered each time?
- What is the cost of ordering and storing the cement?
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