The Allianz Company produces a specialty wood furniture product,and has the following information available concerning its inventory items:

Annual demand is 34,000 packages per year.The purchase price per package is $51.
What is the annual relevant ordering costs?

Question

The Allianz Company produces a specialty wood furniture product,and has the following information available concerning its inventory items:

Annual demand is 34,000 packages per year.The purchase price per package is $51.
What is the annual relevant ordering costs?

Quizplus · Accepted Answer

Unit carrying costs = ($51 × 0.13)+ $5 = $11.63
EOQ = = 1793.27 units
 11ea8a5a_a012_d600_a19c_1138ef9f839e_TB5540_00_TB5540_00_TB5540_00 Annual relevant ordering costs = (34,000 / 1793.27)× $550 = $10,428

The Allianz Company Produces a Specialty Wood Furniture Product,and Has