Annual Demand for a product is constant at 80 000 units. Costs for placing orders,transportation and receiving consignments are fixed at P1 200. Each inventory cycle costsP50 per unit and comes with a holding cost of 6%.RequiredDetermine the number of units that should be ordered to replenish inventory and number oforders per year.

Annual Demand for a product is constant at 80 000 units. Costs for placing orders,transportation and receiving consignments are fixed at P1 200. Each inventory cycle costsP50 per unit and comes with a holding cost of 6%.RequiredDetermine the number of units that should be ordered to replenish inventory and number oforders per year.

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 2CE: Sterling Corporation has an EOQ of 5,000 units. The company uses an average of 500 units per day. An...

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