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Shirley Company requires 40,000 shells for its P500-signature product, "pearly Shirl". The shells, which are purchased from outside suppliers, will be used evenly throughout the year. The cost to place one order is P20, while the cost to carry the shells in inventory for one year is PO.40 Required: a. The optimal order (economic order quantity) b. The number of times the company should place orders within a year. c. The average inventory.

Shirley Company requires 40,000 shells for its P500-signature product, "pearly Shirl". The shells, which are purchased from outside suppliers, will be used evenly throughout the year. The cost to place one order is P20, while the cost to carry the shells in inventory for one year is PO.40 Required: a. The optimal order (economic order quantity) b. The number of times the company should place orders within a year. c. The average inventory.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Problem 4. Inventory Models Shirley Company requires 40,000 shells for its P500-signature product, "pearly Shirl". The shells, which are purchased from outside suppliers, will be used evenly throughout the year. The cost to place one order is P20, while the cost to carry the shells in inventory for one year is PO.40 Required: a. The optimal order (economic order quantity) b. The number of times the company should place orders within a year. c. The average inventory.
Transcribed Image Text:Problem 4. Inventory Models Shirley Company requires 40,000 shells for its P500-signature product, "pearly Shirl". The shells, which are purchased from outside suppliers, will be used evenly throughout the year. The cost to place one order is P20, while the cost to carry the shells in inventory for one year is PO.40 Required: a. The optimal order (economic order quantity) b. The number of times the company should place orders within a year. c. The average inventory.
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