Reference no: EM132253570
Based on last year’s numbers and expected trends into this year, our analysts have concluded the following about the Amulet:
Cost of product: $95/unit
The sales price of the Amulet is $200/unit.
Supplier has confirmed that this will be the average per-unit cost when we place orders in 50-unit increments (Each box has 50 units).
Costs of ordering and delivery: $6,000 per order
We have reached an agreement with the shipping service. All purchases will be billed at a flat rate of $6,000 for each order placed in the normal order cycle, which requires a 5 days lead time.
Rush orders will be charged $40 extra per unit. They will arrive the next day.
The Accounting Department estimates the cost of holding inventory to be $1.35 per unit per day. This amount includes warehouse rental costs and insurance.
FIND THE Economic Order quantity