The Allianz Company produces a specialty wood furniture​ product, and has the following information available concerning its inventory​ items:   Relevant ordering costs per purchase order ​$520 Relevant carrying costs per year for each​ product:        Required annual return on investment ​16%      Required other costs per year ​$9   Annual demand is​ 32,000 prroducts per year. The purchase price per product is​ $51.What is the economic order​ quantity?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter8: Cost Analysis
Section: Chapter Questions
Problem 3E
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The Allianz Company produces a specialty wood furniture​ product, and has the following information available concerning its inventory​ items:
 
Relevant ordering costs per purchase order
​$520
Relevant carrying costs per year for each​ product:
 
     Required annual return on investment
​16%
     Required other costs per year
​$9
 
Annual demand is​ 32,000 prroducts per year. The purchase price per product is​ $51.What is the economic order​ quantity?
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