Fisk Corporation is trying to improve its inventory control system and has installed an online system at its retail stores. Fisk anticipates sales of 75,000 units per year, an ordering cost of $8 per order, and carrying costs of $1.20 per unit. a. What is the economic ordering quantity? Economic ordering quantity (EOQ) b. How many orders will be placed during the year? Number of orders c. What will the average inventory be? Average inventory d. What is the total cost of inventory expected to be? Total costs units units

Fisk Corporation is trying to improve its inventory control system and has installed an online system at its retail stores. Fisk anticipates sales of 75,000 units per year, an ordering cost of $8 per order, and carrying costs of $1.20 per unit. a. What is the economic ordering quantity? Economic ordering quantity (EOQ) b. How many orders will be placed during the year? Number of orders c. What will the average inventory be? Average inventory d. What is the total cost of inventory expected to be? Total costs units units

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 17P

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Title 1. You are inventory manager of Diego Supplies Inc. You computed the EOQ to be 500 units. Annual... Description </o:p> 1. You are inventory manager of Diego Supplies Inc. You computed the EOQ to be 500 units. Annual demand for the company is 5,000 units, and holding cost is $4 per unit. What is the ordering cost? 2. G-Tech’s monthly demand is 250 units. You are in charge of the inventory department. You know that the holding cost is $60 per unit and ordering cost is $100 per order. What is the EOQ? What is the number of orders per year? What is the annual holding cost? If lead time L is one week and demand rate is 60 units per week, what is the ROP?
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