Fisk Corporation is trying to improve its inventory control system and has installed an online system at its retail stores. Fisk anticipates sales of 56,000 units per year, an ordering cost of $8 per order, and carrying costs of $1.40 per unit. In the second year, Fisk Corporation finds that it can reduce ordering costs to $2 per order, but carrying costs will stay the same at $1.40 per unit. Only numbers, no $, no decimal places, no comma. What is the economic ordering quantity for the second year in units? How many orders will be placed during the second year? What will the average inventory be for the second year in units? What is the total cost of ordering and carrying inventory for second year?

Fisk Corporation is trying to improve its inventory control system and has installed an online system at its retail stores. Fisk anticipates sales of 56,000 units per year, an ordering cost of $8 per order, and carrying costs of $1.40 per unit. In the second year, Fisk Corporation finds that it can reduce ordering costs to $2 per order, but carrying costs will stay the same at $1.40 per unit. Only numbers, no $, no decimal places, no comma. What is the economic ordering quantity for the second year in units? How many orders will be placed during the second year? What will the average inventory be for the second year in units? What is the total cost of ordering and carrying inventory for second 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 6E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...

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