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On an Annual Requirement of 100 Items Spread Evenly Throughout

Question 1

Multiple Choice

On an annual requirement of 100 items spread evenly throughout the year,a 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 $130.If the inventory carrying cost is 20 percent per year and assuming no ordering costs:


A) buying 100 at a time will save the company $2,130 per year.
B) buying 100 at a time will save the company $2,260 per year.
C) buying 100 at a time will save the company $3,000 per year.
D) buying 10 at a time will save the company $1,000 per year.
E) buying 10 at a time will save the company $870 per year.

Correct Answer:

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