Scenario 9.3 The Talbot Company Uses Electrical Assemblies to Produce an Array

Scenario 9.3
The Talbot Company uses electrical assemblies to produce an array of small appliances. One of its high cost / high volume assemblies, the XO-01, has an estimated annual demand of 8,000 units. Talbot estimates the cost to place an order is $50, and the holding cost for each assembly is $20 per year. The company operates 250 days per year.
-Use the information in Scenario 9.3. What is the economic order quantity for the XO-01?

A) less than or equal to 100 units
B) greater than 100 units but less than or equal to 180 units
C) greater than 180 units but less than or equal to 250 units
D) greater than 250 units

Correct Answer:

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