Determine the most cost-effective ordering quantity

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Reference no: EM131654062

For product V, a firm has an annual holding cost that is 20% of the item cost, an ordering cost of $10 per order, and annual demand of 1560 units. If ordering at least 390 units, the price per unit is $16; if ordering at least 780 units, the price per unit is $14.

a) Determine the most cost-effective ordering quantity

b) What is the total cost for the order quantity determined in a).

c) Summarize the inventory policy based on your calculation results.

Reference no: EM131654062

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