Using the fixed-order quantity model, which of the following is the total ordering cost of inventory given an annual demand of 36,000 units, a cost per order of $80, and a holding cost per unit per year of $4.

A) $849

B) $1,200

C) $1,889

D) $2,267

E) $2,400

Question

Business

Andrea Mccoy

16 January, 06:42

Using the fixed-order quantity model, which of the following is the total ordering cost of inventory given an annual demand of 36,000 units, a cost per order of $80, and a holding cost per unit per year of $4.

A) $849

B) $1,200

C) $1,889

D) $2,267

E) $2,400

+5

Answers (1)

Know the Answer?

Aubrey House · Answer 1

E) $2,400

Explanation:

optimal order quantity = sqrt{ (2*D*S) / H}

= sqrt{ (2*36,000*$80) / $4}

= $1,200

number of orders per year = $36,000/$1,200

= $30

total ordering cost = $30*$80

= $2,400

Therefore, The total ordering cost of inventory is $2,400.

Using the fixed-order quantity model, which of the following is the total ordering cost of inventory given an annual demand of 36,000 units, a cost per order of $80, and a holding cost per unit per year of $4.A) $849B) $1,200C) $1,889D) $2,267E) $2,400

Using the fixed-order quantity model, which of the following is the total ordering cost of inventory given an annual demand of 36,000 units, a cost per order of $80, and a holding cost per unit per year of $4.

A) $849

B) $1,200

C) $1,889

D) $2,267

E) $2,400