Annual ordering cost and the annual holding cost

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Reference no: EM131707449

The H.A.L. Computer Store sells a printer for $200. Demand for this is constant during the year, and annual demand is forecasted to be 600 units. The holding cost is $20 per unit per year, while the cost of

ordering is $60 per order. Currently, the company is ordering 12 times per year (50 units each time). There are 250 working days per year and the lead-time is 10 days.

REMEMBER TO EXPLICITLY WRITE THE FORMULAS USED.

a) Given the current policy of ordering 50 units at a time, what is the total of the annual ordering cost and the annual holding cost?

Reference no: EM131707449

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