Midwest Charm, Inc. specializes in selling scented farm equipment. The company has established a policy of reordering inventory once a month. A recently employed MBA has considered Midwest's inventory problem from the EOQ model viewpoint. If the following constitute the relevant data, how does the following current policy compare with the optimal policy? Ordering cost Carrying cost Purchase price Total sales for year Safety stock = $2,525 per order = 35% of purchase price = $15,000 per unit = 660 units = 15 9. At the EOQ, how often would the company need to reorder? a. Once a week b. Every other week c. Once a month d. Once every 2 months e. Once every 3 months

Midwest Charm, Inc. specializes in selling scented farm equipment. The company has established a policy of reordering inventory once a month. A recently employed MBA has considered Midwest's inventory problem from the EOQ model viewpoint. If the following constitute the relevant data, how does the following current policy compare with the optimal policy? Ordering cost Carrying cost Purchase price Total sales for year Safety stock = $2,525 per order = 35% of purchase price = $15,000 per unit = 660 units = 15 9. At the EOQ, how often would the company need to reorder? a. Once a week b. Every other week c. Once a month d. Once every 2 months e. Once every 3 months

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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