TS Co has daily demand for ball bearings of 40 a day for each of the 250 working days (50 weeks) of the year. The ball bearings are purchased from a local supplier for $2 each. The cost of placing an order is $64 per order, regardless of the size of the order. The inventory holding costs, expressed as a percentage of inventory purchase price, is 25% per annum. What is the economic order quantity?
TS Co has daily demand for ball bearings of 40 a day for each of the 250 working days (50 weeks) of the year. The ball bearings are purchased from a local supplier for $2 each. The cost of placing an order is $64 per order, regardless of the size of the order. The inventory holding costs, expressed as a percentage of inventory purchase price, is 25% per annum. What is the economic order quantity?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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TS Co has daily demand for ball bearings of 40 a day for each of the 250 working days (50 weeks) of the
year. The ball bearings are purchased from a local supplier for $2 each. The cost of placing an order is $64
per order, regardless of the size of the order. The inventory holding costs, expressed as a percentage of
inventory purchase price, is 25% per annum.
What is the economic order quantity?
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