A Product Has Demand of 4000 Units Per Year

question 107

Multiple Choice

A product has demand of 4000 units per year. Ordering cost is $20 and holding cost is $4 per unit per year. The cost-minimizing solution for this product is to order

• A) all 4000 units at one time
• B) 200 units per order
• C) every 20 days
• D) 10 times per year
• E) none of the above

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Definitions:

Asset Accounts

Accounts that represent the different types of economic resources owned or controlled by an entity.

Land

Real estate or property, minus buildings and equipment, that is considered a fixed asset.

Buildings

Assets categorized under real estate property that are used for business operations or rented out for revenue generation.

Depreciated

The reduction in the recorded cost of a fixed asset in a manner that allocates its cost over the useful life of the asset.