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On an Annual Requirement of 100 Items Spread Evenly Throughout

Question 2

Multiple Choice

On an annual requirement of 100 items spread evenly throughout the year,any purchaser has an opportunity of buying all 100 units at a price of $100 each,or buying 10 units at a time at a price of $150.If the inventory carrying cost is 25 percent per year and assuming no ordering costs:


A) buying 100 at a time will save the company $3,937.50 per year.
B) buying 100 at a time will save the company $4,125 per year.
C) buying 100 at a time will save the company $6,250 per year.
D) buying 10 at a time will save the company $3,875 per year.
E) buying 10 at a time will save the company $5,000 per year.

Correct Answer:

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