What Are the Minimum Total Costs of Carrying and Ordering

question 12

Multiple Choice

What are the minimum total costs of carrying and ordering inventory for a firm that sells 1,500 units with a carrying cost of $2 per unit and places orders in lots of 100?

• A)$100
• B)$200
• C)$400
• D)$430 Total carrying costs:
• = carrying cost per unit x average inventory
• = $2 x (100/2)
• = $100

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Definitions:

Retroactive Interference

A situation in which recently acquired knowledge hinders the ability to remember information that was learned earlier.

Highly Salient Events

Events that significantly stand out and are more easily remembered due to their intensity, emotional impact, or distinctiveness.

Imagery

The use of vivid or figurative language to represent objects, actions, or ideas.

Elaboration

The process of adding more detail or expanding on an idea, often to provide a clearer, more comprehensive understanding.