On an Annual Requirement of 100 Items Spread Evenly Throughout

question 7

Multiple Choice

On an annual requirement of 100 items spread evenly throughout the year, any purchaser has an opportunity of buying all 100 units at a price of $100 each, or buying 10 units at a time at a price of $120. If the inventory carrying cost is 25 percent per year and assuming no ordering costs:

• A) buying 100 at a time will save the company $2,500 per year.
• B) buying 100 at a time will save the company $2,000 per year.
• C) buying 100 at a time will save the company $1,100 a year.
• D) buying 100 at a time will save the company $900 per year.
• E) buying 100 at a time will save the company $200 a year.

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Definitions:

Employee Privacy Protection

Measures and policies that ensure the personal and sensitive information of employees is kept secure and confidential.

Association of Southeast Asian Nations (ASEAN)

A regional intergovernmental organization comprising ten Southeast Asian countries, which promotes political, economic, and security cooperation among its members.

Free Trade Zone

A designated region where goods can be imported, handled, manufactured, and re-exported under specific customs regulation but generally not subject to customs duty.

APEC

The Asia-Pacific Economic Cooperation, a forum for 21 Pacific Rim member economies that promotes free trade throughout the Asia-Pacific region.