Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:The Trektronics store begins each week with 450 phasers in stock. This stock is depleted each week
and reordered. The carrying cost per phaser is $41 per year and the fixed order cost is $130.
a) What is the total carrying cost?
b) What is the total restocking (ordering) cost?
c) Should Trektonics increase or decrease its order size?
d) Calculate the Economic Order Quantity.
e) Describe the optional inventory policy in terms of order size and order frequency.
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