What is the annual ordering cost


Problem:

Item X is a standard item stocked in a company's inventory of component parts. Each year the firm, on a random basis, uses about 2000 units of X which costs $25 each. Storage cost amounts to $5 per unity of average inventory. Every time an order is placed for more item X, it costs $10.

Required:

Question 1) Whenever item X is ordered, what should be the order size?

Question 2) What is the annual ordering cost?

Question 3) What is the annual storing cost? Solve the given numerical problem and illustrate step by step calculation.

Request for Solution File

Ask an Expert for Answer!!
Operation Management: What is the annual ordering cost
Reference No:- TGS0880784

Expected delivery within 24 Hours