A manufacturing company uses 28,000 components at an even rate during the year. Each order placed with the supplier of the components is for 1,500 components, which is the economic order quantity. The company holds a buffer inventory of 700 components. The annual cost of holding one component in inventory is $3. What is the total annual cost of holding inventory of the component?
Hello, please can you explain me this task. i do not know how to start and what formulae to use
Thank you
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ACCOUNTING FOR MATERIAL
1y ago
1y ago#1This question is testing your knowledge of the economic order quantity.
It is explained in my free lectures on Inventory Control.
The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well :-)
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