Suppose that your company sells a product for which the annual demand is 10,000 units. Holding costs are $1.00 per unit per year,and setup costs are $200 per order.What is the minimum total stock administration cost for the product?

Economic Order Quantity = (2* Annual Demand * Ordering Cost) / Carrying Cost We have, Annual Demand…

Answered: Suppose that your company sells a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Suppose that your company sells a product for which the annual demand is 10,000 units. Holding costs are $1.00 per unit per year, and setup costs are $200 per order. What is the minimum total stock administration cost for the product?