A company annually uses 1,200 of a certain spare part that costs $25 for each order and has a $24 annual holding cost.Calculate the total annual cost for order sizes of: 25, 40, 50, 60, and 100.Identify the economic order quantity, and consider the implications for making an error in calculating the economic order quantity.

Question

Quizplus · Accepted Answer

The Answer of A company annually uses 1,200 of a certain spare part that costs $25 for each order and has a $24 annual holding cost.Calculate the total annual cost for order sizes of: 25, 40, 50, 60, and 100.Identify the economic order quantity, and consider the implications for making an error in calculating the economic order quantity.

A Company Annually Uses 1,200 of a Certain Spare Part