#4 KQuestion 4 (of 13) 4 value: 1.00 points Conceptual Question 12-8 Vetox sells
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KQuestion 4 (of 13) 4 value: 1.00 points Conceptual Question 12-8 Vetox sells industrial.. Vetox sells industrial chemicals and one of their inputs can be purchased either in jugs or barrels. A jug contains 1 gallon while a barrel contains 55 gallons. The price per gallon is the same with either container. Vetox is charged a fixed amount per order whether they purchase using jugs or barrels. The inventory holding cost per gallon per month is the same with either jugs or barrels. Vetox chooses an order quantity to minimize ordering and holding costs per year. Would Vetox purchase a greater number of gallons with each order if they purchase with jugs or if they purchase with barrels? °With barrels They would order the same number of gallons with either container OWith jugs OThey might order a greater number of gallons with jugs or with barrels, depending on various factors like the demand rate, ordering cost and holding cost.Explanation / Answer
Since it is mentioned that, cost of holding per gallon remains same for both the containers, also price per gallon remains same, which means there is no additional cost of jugs.
Therefore, the answer is B, they would order the same number of gallons with either containers.
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