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QUESTION 32 Given the following data: D. 29,363 units per year, S - $120 per setup. P - $5 per unit, and - 3.8 per year, Quan
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Answer #1

Setup cost = setup cost per order * Number of orders

Number of orders = Annual demand/ order quantity

Number of orders = 29363/415 =70.7542

Setup cost = 120*70.7542

Setup cost = $ 8490.5060

Holding cost = Average inventory * holding cost per unit per annum

Average inventory = Order quantity/2

Average inventory = 415/2

Average inventory = 207.5

Holding cost = 207.5 * 3.8 = $ 788.5

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