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Blending costs include withdrawing spirits from storage and complete rectification of item. The other various setup costs consist of size changeovers, label changeovers, and order processing costs. The original 1969 figures were also used for the adjusted 1972 figures.
Blending/Withdraw spirits from storage/Complete rectification Varies
Size changeover $8.85
Label changeover $11.78
Order processing cost $51.43
Total $72.06
Annual Demand: Based on Fiscal Year Ending January 1972 sales, located in Exhibit 5. Determined average weekly demand based on the 1971 sales over 52 week period.
Annual Holding Cost (H): We agree with the 1969 figure of 11...
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