If ABC would like follow the EOQ model but also maintain a safety stock of 10,000 cases, how much would the total annual inventory-related costs be?
If ABC would like follow the EOQ model but also maintain a safety stock of 10,000 cases, how much would the total annual inventory-related costs be?
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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The monthly demand of DEF’s sole product is 30,000 cases. Based on data analysis, the carrying cost per case is P30 per year. For each order, ABC spends an average of P200 in worker’s wages, P700 in freight and P550 in other expenses.
If ABC would like follow the EOQ model but also maintain a safety stock of 10,000 cases, how much would the total annual inventory-related costs be?
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