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If the annual demand is 6,000, the order quantity is 1,800, the annual holding costs is...

If the annual demand is 6,000, the order quantity is 1,800, the annual holding costs is 7.00 per unit, and the ordering cost per order is is 75, what is the total of carrying and ordering costs? Round to the nearest penny and do not show any sign (e.g. $234.3845 would be "234.38").

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Answer #1

Given Annual demand, D = 6000; ordering quantity, Q= 1800; annual holding cost, H= 7 per unit; ordering cost per order= 75

Total cost= Annual carrying cost + Annual ordering cost

                   = (Q/2) H + (D/Q) S

                   = (1800/2)x7 + (6000/1800)x75 = 6300+250

                  = 6550

Hence answer is 6550.00

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