Question

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: Group of answer choices 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. buying 100 at a time will save the company $200 a year.

Answer 1

buying 100 at a time will save the company $900 per year

Explanation:

Buying all 100units=100*$100=$10000

Buying 10 at a time=10*$120=$1200*10=$12000

Inventory cost at 25% for all 100 units= 0.25*10000=$2500

Inventory cost at 25% for 10 at a time=0.25*12000=$3000