cost-minimizing solution
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Question 20: A product has demand of 4000 units per year. Ordering cost is $20 and holding cost is $4 per unit per year. The EOQ model is appropriate. The cost-minimizing solution for this product will cost ________ per year in total annual inventory costs.
a) $400
b) $800
c) $1200
d) zero; this is a class C item
e) cannot be determined because unit price is not known
Please select the right answer and provide explanation how you have calculated it.
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Solution Summary
Cost-minimizing solutions are determined.
Education
- BE, Bangalore University, India
- MS, University of Wisconsin-Madison
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