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a) For what value of ordering cost would its action be optimal? Its action would be optimal given an ordering cost of $ per order (round your response to two decimal places).

a) For what value of ordering cost would its action be optimal? Its action would be optimal given an ordering cost of $ per order (round your response to two decimal places).

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Question 1, Problem 12

**Question:** b) If the true ordering cost turns out to be much less than your answer to part (a), what is the impact on the firm's ordering policy? **Options:** - **A.** The order quantity should be decreased. - **B.** The order quantity should not be changed. - **C.** The order quantity should be increased.
Transcribed Image Text:**Question:** b) If the true ordering cost turns out to be much less than your answer to part (a), what is the impact on the firm's ordering policy? **Options:** - **A.** The order quantity should be decreased. - **B.** The order quantity should not be changed. - **C.** The order quantity should be increased.
**Henry Crouch's law office has traditionally ordered ink refills 70 units at a time. The firm estimates that carrying cost is 35% of the $12 unit cost and that annual demand is about 240 units per year. The assumptions of the basic EOQ model are thought to apply. For what value of ordering cost would its action be optimal?** a) For what value of ordering cost would its action be optimal? Its action would be optimal given an ordering cost of $⬜ per order (*round your response to two decimal places*).
Transcribed Image Text:**Henry Crouch's law office has traditionally ordered ink refills 70 units at a time. The firm estimates that carrying cost is 35% of the $12 unit cost and that annual demand is about 240 units per year. The assumptions of the basic EOQ model are thought to apply. For what value of ordering cost would its action be optimal?** a) For what value of ordering cost would its action be optimal? Its action would be optimal given an ordering cost of $⬜ per order (*round your response to two decimal places*).
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