The yearly demand for a widget is 5000 units. The cost of ordering is $100 per order and the cost of holding is $4 per unit per year. If the widget is ordered in batches of 1000 units, what is the total ordering cost for a year? (Use the Economic order quantity assumptions)

The yearly demand for a widget is 5000 units. The cost of ordering is $100 per order and the cost of holding is $4 per unit per year. If the widget is ordered in batches of 1000 units, what is the total ordering cost for a year? (Use the Economic order quantity assumptions)

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Proudction Costs

Section: Chapter Questions

Problem 5SQP

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The yearly demand for a widget is 5000 units. The cost of ordering is $100 per order and the cost
of holding is $4 per unit per year. If the widget is ordered in batches of 1000 units, what is the total
ordering cost for a year? (Use the Economic order quantity assumptions)

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