Tayesha wants to find more information about a career in architecture. which resource is most likely to give balanced, accurate
2 answers:
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Answer:
A. 2%
Explanation:
The computation of the economic order quantity is shown below:
=
where,
Annual demand = 60 bags × 12 months = 720 bags
Ordering cost = $20
Carrying or holding cost = Price × annual inventory holding cost percentage
= $80 × 40%
= $32
Now put these values to the above formula
So, the value would equal to
=
= 30 bags
The number of orders would be equal to
= Annual demand ÷ economic order quantity
= 720 ÷ 30
= 24 orders
c. The average inventory would equal to
= Economic order quantity ÷ 2
= 30 bags ÷ 2
= 15 bags
d. The total cost of ordering cost and carrying cost equals to
Ordering cost = Number of orders × ordering cost per order
= 24 orders × $20
= $480
Carrying cost = Average inventory × carrying cost per unit
= 15 bags × $32
= $480
So, the total would be
= $480 + $480
= $960
And, the total purchase cost = Annual demand × price per bag
= 720 × $80
= $57,600
Now the percentage would be
= Total cost ÷ Total purchase cost
= $960 ÷ $57,600
= 1.67%