If the order quantity per order is 2,000 units,annual demand is 10,000,and cost per order is $50,then which of the following statements is true?
A)There are five orders in the year.
B)The total annual ordering cost is $2,500.
C)The holding cost per unit is $2.50.
D)The total annual holding costs are $25,000 (= $2.50 * 10,000).

Question

Quizplus · Accepted Answer

The number of orders in a year is calculated by dividing the annual demand by the order quantity per order. Thus, with an annual demand of 10,000 units and an order quantity of 2,000 units per order, there would be 10,000 / 2,000 = 5 orders in the year.

If the Order Quantity Per Order Is 2,000 Units,annual Demand