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A retail company sells 7200 washing machines per annum.The administrative cost of placing one order is estimated at $100.Each washing machine costs $140 and company finances its working capital requirements by means of an overdraft on which it pays interest of 10% per annum.Other variable costs of holding one unit for one year have been estimated as $22 per unit.If company uses economic order quantity model,what should be the order size?
option for answers:
A 200 machines
B220 machines
C 240 machines
D264 machines
Can you please helpWhy are you attempting a question for which you do not have an answer? You should be using a Revision Kit from one of the ACCA Approved Publishers. It has answers and explanations.
Please watch my free lectures on Inventory Management where this is all explained.
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