Respuesta :
A company will begin stocking remote control devices. The annual demand is 9,000 units
Providing the following results:
Annual demand, D = 750 × 12
= 9,000 units
Ordering cost, s = $30 per order
Annual holding cost, h = $0.25 per unit
so Q= (2.D.S/h)1/2
= (2 ×9000 × 30/0.25)^0.5
=367.42
*feasible quantity is 500 and above as per Q
*Annual ordering cost = (D/Q) ×s
=(9000/367.42 )30
=734.7
*Annual holding cost = (Q/2) ×h
=(367.42/2)0.25
= 45.93
*Annual cost of material = D × C
=9000 × 16. 10
= 144,900
*Total annual cost=Annual holding cost+Annual ordering cost+Annual cost of purchase
= 145,681
Holding costs are the costs associated with storing unsold inventory. The costs of running a business include storage space, labor costs, insurance, and the price of damaged or spoiled goods. Minimizing inventory costs is an important supply chain management strategy.
Why is cost of holding important?
Maintenance costs are important. Because the brand indicates how long they can keep those items in stock before they are no longer profitable. It also helps brands maintain optimal inventory levels by knowing how much to buy and sell to meet demand without overstocking.
Is the cost of holding a fixed cost?
Since there is no direct relationship between cost and quantity, carrying costs are considered fixed and allocated to inventory. Companies that use volume discounts tend to have higher storage costs because they need to buy in bulk and store for long periods of time.
Learn more about holding costs:
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