The Only Product of a Company Has an Annual Demand

question 113

Essay

The only product of a company has an annual demand of 14,000 units. The cost of placing an order is $70 and the cost of carrying one unit in inventory for one year is $20.
Required:
Determine the economic order quantity.

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Definitions:

Earmarks

Narrow, specially designated spending authorizations placed in broad legislation by senators and representatives for the purpose of providing benefits to firms and organizations within their constituencies. Earmarked projects are exempt from competitive bidding and normal evaluation procedures.

Public Subsidies

Financial support provided by the government to individuals, organizations, or industries to promote desired activities or reduce burden.

Special-Interest Effect

The impact of a small, focused group influencing policy for its own benefit, often at the broader public's expense.

Pork-Barrel Politics

The allocation of government spending for localized projects secured primarily to bring money to a representative's district, with the implication of gaining the representative favor or votes.