Suppose that a manufacturer has one major buyer who orders its eoq of 20,000 units about once per month. annual demand is 240,000 units. the manufacturer has a setup cost of $180 per order and a holding cost per unit of $10. if the manufacturer practices lot-for-lot production, what would be the manufacturer’s annual holding and setup cost?
a. $1
b. $20,000
c. $2,160
d. $102,160
e $40,000

Total cost $2160

Explanation:

Lot for lot production means the manufacturer produces the items only when it recieves the order. He doesn't make anything extra for the inventory. Even though he is certain that he will get the order, he will start manufacturing only when he recieves the order.

So Holding cost = 0 (since no inventory)

Set up cost for one time = $ 180

No of orders in a year = 12 (once a month)

Total set up cost = 18*12 = 2160$

Total cost = 2160 + 0 = $2160

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know