Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
![me
EOQ, reorder point, and safety stock Alexis Company uses 905 units of a product per year on a continuous basis. The product has a fixed cost of $49 per order,
and its carrying cost is $5 per unit per year. It takes 5 days to receive a shipment after an order is placed, and the firm wishes to hold 10 days' usage in inventory as a
safety stock.
a. Calculate the EOQ.
b. Determine the average level of inventory. (Note: Use a 365-day year to calculate daily usage.)
c. Determine the reorder point.
d. Indicate which of the following variables change if the firm does not hold the safety stock: (1) order cost, (2) carrying cost, (3) total inventory cost, (4) reorder point, (5)
economic order quantity.
ents
un
a. Alexis' EOQ is
units. (Round to the nearest whole number.)
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Transcribed Image Text:me
EOQ, reorder point, and safety stock Alexis Company uses 905 units of a product per year on a continuous basis. The product has a fixed cost of $49 per order,
and its carrying cost is $5 per unit per year. It takes 5 days to receive a shipment after an order is placed, and the firm wishes to hold 10 days' usage in inventory as a
safety stock.
a. Calculate the EOQ.
b. Determine the average level of inventory. (Note: Use a 365-day year to calculate daily usage.)
c. Determine the reorder point.
d. Indicate which of the following variables change if the firm does not hold the safety stock: (1) order cost, (2) carrying cost, (3) total inventory cost, (4) reorder point, (5)
economic order quantity.
ents
un
a. Alexis' EOQ is
units. (Round to the nearest whole number.)
eText
edia Librai
al Calculat
r Resource Enter your answer in the answer box and then click Check Answer.
ic Study
3 parts
remaining
es
Clear All
Check Answer
unication Tools >
OK
10
Type here to search
5/1
insert
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