On an annual requirement of 100 items spread evenly throughout the year, any purchaser has an opportunity of buying all 100 units at a price of $100 each, or buying 10 units at a time at a price of $120. If the inventory carrying cost is 25 percent per year and assuming no ordering costs:
 Student Answer:Â
buying 100 at a time will save the company $2,500 per year.
  buying 100 at a time will save the company $2,000 per year.
  buying 100 at a time will save the company $1,100 a year.
 ----> buying 100 at a time will save the company $900 per year. (Correct Answer)
  buying 100 at a time will save the company $200 a year.
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What i want to know why is, WHY it is the correct answer, i was originally going to go with the 2000 dollars a year saved, I looked the question up and turns out that 900 a year is actually the correct one but again i do not get why that is.
Answers
Status NEW
Posted 26 May 2017 03:05 AM
My Price 10.00
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