What is the current price of a $1,000 par value bond maturing in 12 years with a coupon rate of 14 percent, paid semiannually, t
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Answer:
D. Holding cost per unit per year is dependent on the selling price per unit.
Explanation:
The formulas are shown below:
Economic order quantity:
=
The number of orders would be equal to
= Annual demand ÷ economic order quantity
The average inventory would equal to
= Economic order quantity ÷ 2
The total cost of ordering cost and carrying cost equals to
Ordering cost = Number of orders × ordering cost per order
Carrying cost = average inventory × carrying cost per unit
If in the question, the carrying cost is given in the percentage than the per unit cost is come after multiplying it with the selling price per unit