Using the Fixed-Order-Quantity Model, Which of the Following Is the Total

question 94

Multiple Choice

Using the fixed-order-quantity model, which of the following is the total ordering cost of inventory given an annual demand of 36,000 units, a cost per order of $80, and a holding cost per unit per year of $4?

• A) $849
• B) $1,200
• C) $1,889
• D) $2,267
• E) $2,400

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Definitions:

Expenses

Costs incurred in the process of generating revenue, including operational costs like rent, utilities, salaries, and materials.

Sales

The process of selling goods or services in exchange for money or other compensation.

Supplier Relationship

The interaction and management of connections between a company and the businesses that supply the materials or services it uses in its operations.

Verbal Understandings

Agreements or terms reached through spoken communication, which may not be formally documented in writing.