Final answer:
The annual ordering cost when the lot size is 67 units is calculated by first determining the number of orders per year (29), then multiplying by the ordering cost per order ($45) to get $1305. The closest provided range option has a typo and should include a limit higher than $1150.
Step-by-step explanation:
To calculate the annual ordering cost for product Y, we first need to determine how many orders are made each year. Since the demand is 1908 units and each order has a lot size of 67 units, we can calculate the number of orders by dividing the total annual demand by the lot size:
Number of orders = Total demand / Lot size = 1908 units / 67 units/order ≈ 28.4776 ≈ 29 orders/year (since you can't place a fraction of an order, we round up to the nearest whole number).
The annual ordering cost is found by multiplying the number of orders by the ordering cost per order:
Annual ordering cost = Number of orders * Ordering cost per order = 29 orders/year * $45/order = $1305/year.
The correct range for the annual ordering cost, according to the options provided, is thus:
d. More than 1000 but less than or equal to 1150 (This is assuming a typo in the question; based on the calculation, the actual range should be more than 1150.)