noathequeen
24.08.2020 •
Business
A produce distributor uses 800 packing crates a month, which it purchases at a cost of $10 each. The manager has assigned an annual carrying cost of 35 percent of the purchase price per crate. Ordering costs are $28. Currently the manager orders once a month.
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Ответ:
Explanation:
Base on the scenario been described in the question, we use the following method to solve the given problem.
Step 1
Expected value of profit can be calculated by using formula: Selling price - Expected value of Procurement cost - Expected value of Labour cost - Expected value of Transportation cost
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Step 2
Expected value of Profit = $45 - $11.05- $23.4 - $3.5 = $ 7.05
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Step 3
Confidence Interval can be calculated by using the formula shown below
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