SOLUTION: ABC Company sells 5,500 pens per year with a constant demand throughout the year. ABC
purchases the pens at the cost of $300 per unit. Ordering cost for the company is S 100 per
Algebra.Com
Question 1178940: ABC Company sells 5,500 pens per year with a constant demand throughout the year. ABC
purchases the pens at the cost of $300 per unit. Ordering cost for the company is S 100 per
order. Holding cost for the company is S 10 per year. Currently the company is ordering the
products in lots of 200 units. What would be the total holding cost for ABC?
Answer by CPhill(1959) (Show Source): You can put this solution on YOUR website!
Here's how to calculate the total holding cost for ABC Company:
**1. Calculate the Average Inventory:**
* The average inventory is half of the order quantity.
* Average Inventory = Order Quantity / 2
* Average Inventory = 200 units / 2 = 100 units
**2. Calculate the Total Holding Cost:**
* Total Holding Cost = Average Inventory * Holding Cost per Unit per Year
* Total Holding Cost = 100 units * $10/unit = $1000
**Therefore, the total holding cost for ABC Company is $1000.**
RELATED QUESTIONS
A company makes pens. They sell each pen for $
5
.
Their revenue is represented by (answered by ikleyn)
Can you please help me with this?
Two students are going to the store to buy school... (answered by josgarithmetic)
A company makes pens. They sell each pen for $10.
Their revenue is represented by R =... (answered by greenestamps)
your are purchasing pens and pencils to be sold at the school store. You need a total of... (answered by macston)
You are purchasing pens and pencils to be sold at the school store. You need a total of... (answered by TimothyLamb)
Tyler spent $19 on a bookand pens. If the book cost $4.00 and each pack of pens cost $5 , (answered by fractalier)
if 5 pens cost £3.60, find the cost of 12 pens?
(answered by rfer)
Pens are sold in packets of 15 pens per packet. The pens are of different colour and 20%... (answered by ewatrrr)
If 10 pens and 15 markers cost $26, and 5 of the same pens and 10 of the same markers... (answered by solver91311)