A company wishes to establish an EOQ for an item for which the annual demandis $800,000, the ordering cost is $32, and the cost of carrying inventory is 20%.Calculate the following:a. The EOQ in dollars.b. Number of orders per year.c. Cost of ordering, cost of carrying inventory, and total cost.d. How do the costs of carrying inventory compare with the costs of ordering?
A company wishes to establish an EOQ for an item for which the annual demandis $800,000, the ordering cost is $32, and the cost of carrying inventory is 20%.Calculate the following:a. The EOQ in dollars.b. Number of orders per year.c. Cost of ordering, cost of carrying inventory, and total cost.d. How do the costs of carrying inventory compare with the costs of ordering?
Chapter10: Inventory
Section: Chapter Questions
Problem 2TP: Assume your company uses the periodic inventory costing method, and the inventory count left out an...
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A company wishes to establish an EOQ for an item for which the annual demand
is $800,000, the ordering cost is $32, and the cost of carrying inventory is 20%.
Calculate the following:
a. The EOQ in dollars.
b. Number of orders per year.
c. Cost of ordering, cost of carrying inventory, and total cost.
d. How do the costs of carrying inventory compare with the costs of ordering?
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