Calculating the annual cost

Reference no: EM1363621

The X is a standard item stocked in a company's inventory of component parts. Each year the firm, on a random basis, uses a bout 2,000 of item X, which costs $25 each. Storage costs, which include insurance and cost of capital, amount to $5 per unit of average inventory. Every time an order is placed for more item X, it costs $10.

a. Whenever item X is ordered, what should be the order size?
b. What is the annual cost for ordering item X?
c. What is the annual cost for storing item X?

Reference no: EM1363621

Questions Cloud

At what average rate does the force from the cable : Water flows through a horizontal tube of diameter 3.0 m that is joined to a second horizontal tube of diameter 2.2 . The pressure difference between the tubes is 8.0 kpa . Find out the speed of flow in the first tube.

Explain develop an analysis of the fast food industry : Explain develop an analysis of the fast food industry using Mcdonald's as your primary focus

Kind of youth sport offerings in north america : Describe what the four basic types of youth sport offerings are in North America. Provide at least one descriptive example for each.

Explain what is demand for phone calls : If a 20% decrease in th price of long distancephone calls leads to a 35% rise in the quantity of calls demanded, you may conclude that the demand for phone calls is.

Calculating the annual cost : The X is a standard item stocked in a Corporation inventory of component parts. Each year the Corporation, on a random basis, uses a bout 2,000 of item X, which costs $25 each.

Current operating performance concepts of income : All-inclusive and current operating performance concepts of income represent opposing views regarding the inclusion of items to be reported in earnings on the income statement.

Show functions of financial management : Describe what the two functions of financial management are. Identify and define the three categories of entries on a balance sheet and two categories on an income statement.

Cardiac output and cardiac workload : How do heart rate, preload, afterload, and contractility affect cardiac output and cardiac workload?

Analogical reading : Explain the concept of analogical reasoning and describe a decision in your personal life that would have benefited from analogical reasoning.

User Account

All Pages