USE THE FOLLOWING INFORMATION FOR THE NEXT 2 QUESTIONS: XYZ Company produces a single product,...
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USE THE FOLLOWING INFORMATION FOR THE NEXT 2 QUESTIONS: XYZ Company produces a single product, and has the following information available concerning this item: Relevant ordering costs per purchase order $350 10% Relevant carrying costs/unit per year: Required annual return on investment (Hurdle Rate) Required other costs per year (insurance, etc.) $2.00 Annual demand is 70,000 units per year. The purchase price per package is $50. HINT: When you are calculating total carrying cost/unit, don't forget to add opportunity cost to the $2.00/unit. 46. What is the economic order quantity (EOQ)? a. 2,446 units b. 2,646 units c. 2,846 units d 3,046 units 47. What are the relevant total costs (ordering cost + carrying cost) if XYZ Company insists on using an order size equal to 1,000 units? a. $22,000 b. $24,000 $26,000 c. d. $28.000 d ong and
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