2. The ABC Company consumes inventory of 67,500 units of components per year. The carrying cost per unit is RO 1.50. The fixed order cost is RO 25 per order. The production planning is 365-day year. a. What is the Economic Order Quantity (EOQ)? Interpret. 219 S b. Calculate and interpret the optimal number of orders to be placed. the ida c. If it takes five days to receive an order from suppliers, at what inventory level should ABC Company place another order.Interpret.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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2. The ABC Company consumes inventory of 67,500
units of components per year. The carrying cost per
unit is RO 1.50. The fixed order cost is RO 25 per order.
The production planning is 365-day year.
a. What is the Economic Order Quantity (EOQ)?
Interpret.
219 S
b. Calculate and interpret the optimal number of orders
to be placed.
the ida
c. If it takes five days to receive an order from
suppliers, at what inventory level should ABC Company
place another order.Interpret.
Transcribed Image Text:2. The ABC Company consumes inventory of 67,500 units of components per year. The carrying cost per unit is RO 1.50. The fixed order cost is RO 25 per order. The production planning is 365-day year. a. What is the Economic Order Quantity (EOQ)? Interpret. 219 S b. Calculate and interpret the optimal number of orders to be placed. the ida c. If it takes five days to receive an order from suppliers, at what inventory level should ABC Company place another order.Interpret.
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