Following Is Information Pertaining to Material That Is Used in the Assembly

Essay

Following is information pertaining to material that is used in the assembly of automobiles: $\begin{array}{ll}\text { Annual demand } & 4,000 \text { units } \\\text { Unit cost } & £ 25 \\\text { Cost of placing an order } & £ 600 \\\text { Carrying cost as a percentage of unit cost } & 10 \%\end{array}$
a.Calculate total annual carrying costs for an order quantity of 200 units per order.
b.Calculate total annual ordering costs for an order quantity of 200 units per order.
c.Determine the optimal order size.