A) What is the EOQ? B) If they order 1000 at a time, what are total ordering and holding costs per year? C) If they order 6000 at a time, what is the holding cost PER CAN? D)If they must order in multiples of 1920, how many should they order?
A) What is the EOQ? B) If they order 1000 at a time, what are total ordering and holding costs per year? C) If they order 6000 at a time, what is the holding cost PER CAN? D)If they must order in multiples of 1920, how many should they order?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints
Section: Chapter Questions
Problem 7E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...
Related questions
Question
Please answer all parts
![8. An item sells for $1.25 per can with demand of 500 cans per week. They buy it for $.50 per can with an order cost of
$20. Yearly inventory holding cost is 25%.
A) What is the EOQ?
B) If they order 1000 at a time, what are total ordering and holding costs per year?
C) If they order 6000 at a time, what is the holding cost PER CAN?
D)If they must order in multiples of 1920, how many should they order?
E) If they order at least 7680 cans, they get a 4% discount. If they order 7680, what would be the ANNUAL ordering
cost?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F25de968c-c28b-4986-a23a-8fba89c37c2f%2F885b95af-0157-4c0f-89de-a1638605c455%2Fw8fucju_processed.jpeg&w=3840&q=75)
Transcribed Image Text:8. An item sells for $1.25 per can with demand of 500 cans per week. They buy it for $.50 per can with an order cost of
$20. Yearly inventory holding cost is 25%.
A) What is the EOQ?
B) If they order 1000 at a time, what are total ordering and holding costs per year?
C) If they order 6000 at a time, what is the holding cost PER CAN?
D)If they must order in multiples of 1920, how many should they order?
E) If they order at least 7680 cans, they get a 4% discount. If they order 7680, what would be the ANNUAL ordering
cost?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
![EBK CFIN](https://www.bartleby.com/isbn_cover_images/9781337671743/9781337671743_smallCoverImage.jpg)
![Intermediate Financial Management (MindTap Course…](https://www.bartleby.com/isbn_cover_images/9781337395083/9781337395083_smallCoverImage.gif)
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
![EBK CFIN](https://www.bartleby.com/isbn_cover_images/9781337671743/9781337671743_smallCoverImage.jpg)
![Intermediate Financial Management (MindTap Course…](https://www.bartleby.com/isbn_cover_images/9781337395083/9781337395083_smallCoverImage.gif)
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning