ENTREPRENEURIAL OPERATIONS
INVENTORY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Total storage cost =?
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average inventory x ordering cost per unit
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average cost x storage cost per unit
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storage cost + carrying cost
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number of times orderd x cost per order
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Explanation:
Detailed explanation-1: -A straightforward and easy-to-use procedure, the total-cost formula is calculated by dividing the total production cost by the number of products manufactured.
Detailed explanation-2: -Cost per unit = (Electricity + Rent + Labor + Raw materials) / Number of units.
Detailed explanation-3: -The formula is: EOQ = square root of: [2(setup costs)(demand rate)] / holding costs.
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