Respuesta :
Answer:
Total annual inventory cost = $1,487.56
Explanation:
As per the data given in the question,
Ordering cost = $35
Ordering quantity = 90 gallons
Price = $4.00
Holding cost = 40% × $4 = $1.6 per unit per year
Weekly demand = 70 gallons
No. of weeks in a year = 52
Yearly demand = 52 × 70
= 3,640
Numbers of orders = 3,640 ÷ 90
= 40.444
Total ordering cost = 40.444 × $35
= 1,415.56
Inventory holding cost = (90 ÷ 2) × $1.6
= $72
Hence total annual inventory cost = 1,415.56 + $72
= $1,487.56
The annual index cost is the whole expense of annual holdings and yearly service charges.
The total annual inventory cost will be $1,487.56
This can be estimated by:
Given,
- Cost of ordering = $35
- Ordering number = 90 gallons
- Price = $4.00
Cost of holding = [tex]40\% \times \$4 = \$1.6 \; \text{per unit per year}[/tex]
Weekly needs = 70 gallons
Number of weeks in a year = 52
Yearly demand = [tex]52 \times 70 = 3,640[/tex]
Numbers of orders = [tex]\dfrac{ 3640}{90} = 40.444[/tex]
[tex]\text{Total ordering price} = 40.444 \times \$35 = 1,415.56[/tex]
[tex]\text{Inventory holding amount} = \dfrac{90}{2} \times $1.6 = \$72[/tex]
Total inventory cost = 1,415.56 + $72 = $1,487.56
Therefore, the total annual inventory cost will be $1,487.56
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