A Firm Uses an Inventory Item with the Following Characteristics

question 146

Multiple Choice

A firm uses an inventory item with the following characteristics. $\begin{array}{lr}\text {Cost per-item }&\$ 6.00\\\text { Annual consumption}&1,000\\\text { Fixed cost per order placed}&\$ 30.00 \\\text {Carying cost of inventory (as a \( \% \) of dollar value) }&25 \%\\\end{array}$
How many times should the product be reordered each year and what are the related ordering and carrying costs of inventory?
$\text { Reorders } \quad \text { CaryingCosts } \quad \text { OrderingCosts }$

• A) 5 $150 $150
• B) 3.3 $150 $150
• C) 5 $300 $150
• D) 3.3 $300 $300

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Definitions:

Portfolio Analysis

The evaluation of certain elements of a product line to assess their contribution to the overall strategy and performance of a business or individual.

Client Value Planning

A strategy focusing on maximizing the value delivered to clients, enhancing satisfaction, and fostering long-term relationships.

Organizational Strategy

A plan of action designed to achieve the long-term goals of an organization.

Strategic Issues

These are critical uncertainties or challenges that affect an organization's ability to achieve its goals, requiring careful consideration and planning to address effectively.