The Grey Sofa Company produces a specialty chairs, and has the following information available concerning its inventory items: Relevant ordering costs per purchase order Relevant carrying costs per package per year: Required annual return on investment Required other costs per year $150.00 10% $ 1.40 Annual demand is 10,000 chairs per year. The purchase price per unit is $16. What is the economic-order quantity? (HINT: Consider the annual opportunity cost per unit of $16 x 10% = $1.60)
The Grey Sofa Company produces a specialty chairs, and has the following information available concerning its inventory items: Relevant ordering costs per purchase order Relevant carrying costs per package per year: Required annual return on investment Required other costs per year $150.00 10% $ 1.40 Annual demand is 10,000 chairs per year. The purchase price per unit is $16. What is the economic-order quantity? (HINT: Consider the annual opportunity cost per unit of $16 x 10% = $1.60)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:The Grey Sofa Company produces a specialty chairs, and has the following information available concerning its inventory items:
Relevant ordering costs per purchase order
Relevant carrying costs per package per year:
Required annual return on investment
Required other costs per year
$150.00
425 units
10%
Annual demand is 10,000 chairs per year. The purchase price per unit is $16.
O 1,000 units
O 5,000 units
$ 1.40
What is the economic-order quantity? (HINT: Consider the annual opportunity cost per unit of $16 x 10% = $1.60)
O 1,464 units
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