NAPA Wine Company is a retailer which sells vintage wines. The company has established a policy of reordering inventory every 30 days. A consultant has suggested NAPA considering its inventory problem from the EOQ model viewpoint. The following constitute the relevant data. Ordering cost = $12 per order Carrying cost = 20% of purchase price Purchase price = $11 per unit Total sales for year = 5,000 units Safety stock = 0 How much total costs under the current policy exceed those under the EOQ?
NAPA Wine Company is a retailer which sells vintage wines. The company has established a policy of reordering inventory every 30 days. A consultant has suggested NAPA considering its inventory problem from the EOQ model viewpoint. The following constitute the relevant data. Ordering cost = $12 per order Carrying cost = 20% of purchase price Purchase price = $11 per unit Total sales for year = 5,000 units Safety stock = 0 How much total costs under the current policy exceed those under the EOQ?
Chapter1: Financial Statements And Business Decisions
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NAPA Wine Company is a retailer which sells vintage wines. The
company has established a policy of reordering inventory every 30 days. A consultant has suggested NAPA considering its inventory problem from the EOQ model viewpoint. The following constitute the relevant data.
Ordering cost = $12 per order
Carrying cost = 20% of purchase price
Purchase price = $11 per unit
Total sales for year = 5,000 units
Safety stock = 0
How much total costs under the current policy exceed those under the EOQ?
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