Henderson Drapes Ltd uses 960,000 meters of fabric each year for production. The company orders fabric at a cost of $3 per meter, plus fixed ordering costs of $150 per order. The carrying cost is 15% of the inventory value at cost. Assume a 365-day year for this company. What is the company's estimated EOQ?
Henderson Drapes Ltd uses 960,000 meters of fabric each year for production. The company orders fabric at a cost of $3 per meter, plus fixed ordering costs of $150 per order. The carrying cost is 15% of the inventory value at cost. Assume a 365-day year for this company. What is the company's estimated EOQ?
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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Transcribed Image Text:Henderson Drapes Ltd uses 960,000 meters of fabric
each year for production. The company orders fabric at a
cost of $3 per meter, plus fixed ordering costs of $150
per order. The carrying cost is 15% of the inventory value
at cost. Assume a 365-day year for this company.
What is the company's estimated EOQ?
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