Post Card Depot, a large retailer of post cards, orders 4,346,060 post cards per
ID: 2740358 • Letter: P
Question
Post Card Depot, a large retailer of post cards, orders 4,346,060 post cards per year from its manufacturer. Post Card Depot plans on ordering post card 6 times over the next year. Post Card Depot receives the same number of post cards each time it orders. The carrying cost is $0.23 per post card per year. The ordering cost is $286 per order. What is the annual carrying costs of post card inventory (round the answer to two decimal places)? Correct answer is 83,299.48. Explain please.
Post Card Depot, an large retailer of post cards, orders 3,048,600 post cards per year from its manufacturer. Post Card Depot plans on ordering post card 9 times over the next year. Post Card Depot receives the same number of post cards each time it orders. The carrying cost is $0.23 per post card per year. The ordering cost is $495 per order.
What is the annual ordering cost of the post card inventory? (Round the answer to two decimal places). Correct Answer 4,455.00 Explain please.
Post Card Depot, a large retailer of post cards, orders 8,420,940 post cards per year from its manufacturer. Post Card Depot plans on ordering post card 22 times over the next year. Post Card Depot receives the same number of post cards each time it orders. The carrying cost is $0.27 per post card per year. The ordering cost is $338 per order.
What is the annual total costs of post card inventory? (Round the answer to two decimal places). Correct Answer 59,109.95 Explain Please.
Explanation / Answer
1) Annual carrying cost = Average inventroy*carrying cost per unit = 362171.67*0.23 = $83,299.48
Order quantity = 4346060/6 = 724343.33, Average inventory = Order quantity/2 = 724343.33/2 = 362171.67
2) Annual ordering cost = No of orders*cost per order = $495*9 = $4,455
3) Total cost of post card inventory = ordering cost + carrying cost
= 22*338 + (8420940/22*2)*0.27 = 7436+51673.95 = $59,109.95