Question

A two-bin approach is used to control inventory for a certain low-cost hardware item. Each bin holds 300 units of the item. When one bin becomes empty, an order for 300 units is released to replace the stock in that bin. The order lead time is less than the time it takes to deplete the stock in one bin, so the chance of a stock-out is low. Annual usage of the item is 4000 units. Ordering cost is $30.
(a) What is the imputed holding cost per unit for this item, based on the data given?

Answer 1

Answer:

Answer is given in the attachment.

Explanation:

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