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The Gentry Garden Center sells 120,000 bags of lawn fertilizer annually. The optimal safety stock (which is on hand initially) is 1,000 bags. Each bag costs the firm $1.50, the inventory carrying cost is 20%, and the cost of placing an order with its supplier is $20. a. What is the Economic Ordering Quantity? b. What is the total Inventory cost with the safety stock? c. How often must the company order?

The Gentry Garden Center sells 120,000 bags of lawn fertilizer annually. The optimal safety stock (which is on hand initially) is 1,000 bags. Each bag costs the firm $1.50, the inventory carrying cost is 20%, and the cost of placing an order with its supplier is $20. a. What is the Economic Ordering Quantity? b. What is the total Inventory cost with the safety stock? c. How often must the company order?

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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The Gentry Garden Center sells 120,000 bags of lawn fertilizer annually. The optimal safety stock (which is on hand initially) is 1,000 bags. Each bag costs the firm $1.50, the inventory carrying cost is 20%, and the cost of placing an order with its supplier is $20. a. What is the Economic Ordering Quantity? b. What is the total Inventory cost with the safety stock? c. How often must the company order?

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