Solved

The Wonderful Hair Salon Buys Lots of Shampoos

Question 31

Multiple Choice

The Wonderful Hair Salon buys lots of shampoos. Wonderful follows the exponential-smoothing forecasting method, and based on their forecast calculations, annual demand is 750 units. Wonderful normally pays $3.00 per shampoo bottle when ordering from its supplier. Each order that is placed with the supplier costs $18 to process. Wonderful's holding cost for shampoos is 15% of the cost of the shampoo bottle per year.
-Based on the annual total inventory cost values, which offer should Wonderful take?


A) $3.00 per bottle for 245 units
B) $3.00 per bottle for 299 units
C) $2.50 per bottle for 245 units
D) $2.50 per bottle for 300 units
E) Do not have enough information to answer the question

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents