A firm has an annual demand for 1,500 units of inventory. The cost of placing an order each time is $100, and the cost to store each item of inventory annually is $3. What is the optimal amount of stock that should be ordered?

A firm has an annual demand for 1,500 units of inventory. The cost of placing an order each time is $100, and the cost to store each item of inventory annually is $3. What is the optimal amount of stock that should be ordered?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 11P: Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35...

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I am looking for the correct answer to this Financial accounting question with appropriate explanations.

A firm has an annual demand for 1,500 units of inventory.
The cost of placing an order each time is $100, and the
cost to store each item of inventory annually is $3. What
is the optimal amount of stock that should be ordered?

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A firm is planning for its financing needs and uses the basic fixed-order-quantity inventory model (EOQ). What is the total cost (TC), including purchasing cost, of the inventory given an annual demand of 12,000 units, ordering cost of $40, a holding cost per unit per year of $5, an EOQ of 500 units, and a cost per unit of inventory of $120? Provide answer
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