Question

A company's cost is sh.25 and the holding cost is 19% of average inventory. Given that the total cost is she.750, find the demand.

Answer 1

Total cost = holding cost + ordering cost

holding cost = $750-25=725$ = 19% x average inventory

average inventory = $725/0.19=3816$

Demand = average inventory/ordering cost

Demand = $3816/25=152$