Answered

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Stationery Supplies is considering installing an inventory control system in its store in Provo, Utah. The store carries about 1,400 different inventory items and has annual gross sales of about $80,000. The inventory control system would cost $12,500 to install and about $2,000 per year in additional supplies, time, and maintenance. If the savings to the store from the system can be represented as a fixed percentage of annual sales, what would that p

Sagot :

Tundexi

Answer:

5.63%

Explanation:

Missing word "have to be in order for the system to pay for itself in five years or less?"

Total cost = Installation cost + Holding cost

Total cost = 12500 + (2000*5)

Total cost = $22,500

Sales * Saving rate * Number of years = Total cost

80,000 * S * 5 = $22,500

S = $22,500/$400,000

S = 0.05625

S = 5.63%

Thus, it is required for the company to have 5.62% of saving rate per year to pay for the system.

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