Question:

Suppose you purchase from a supplier at $4 per unit a part with which you assemble rd widgets. On average, you use 50,000 units of this part each year. Every time you order this particular part, you incur a sizeable ordering cost of $800 regardless of the number of parts you order. Your cost of capital is 20% per year.

1. How many parts should you purchase each time you place an order?
2. To satisfy annual demand, how many times per year will you place orders from this part?

Price: $2.99

Solution: The downloadable solution consists of 1 pages
Deliverable: Word Document