A supplier sells Hipoint-brand pens to stationary shops. The annual demand is approximately 24,000 pens. The supplier pays SR5 for each pen and estimates that the annual holding cost is 30 percent of the pen's value. It costs approximately SR350 to place an order. The supplier currently buys 1000 pens per order i. Determine the annual ordering and inventory cost (in SR) for current order quantity. ii. Determine the economic order quantity (EOQ). iii. Determine the total annual cost for the EOQ
A supplier sells Hipoint-brand pens to stationary shops. The annual demand is approximately 24,000 pens. The supplier pays SR5 for each pen and estimates that the annual holding cost is 30 percent of the pen's value. It costs approximately SR350 to place an order. The supplier currently buys 1000 pens per order i. Determine the annual ordering and inventory cost (in SR) for current order quantity. ii. Determine the economic order quantity (EOQ). iii. Determine the total annual cost for the EOQ
Chapter18: The Management Of Accounts Receivable And Inventories
Section: Chapter Questions
Problem 17P
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Question 3:
A supplier sells Hipoint-brand pens to stationary shops. The annual demand is
approximately 24,000 pens. The supplier pays SR5 for each pen and estimates that the
annual holding cost is 30 percent of the pen's value. It costs approximately SR350 to place
an order. The supplier currently buys 1000 pens per order
i. Determine the annual ordering and inventory cost (in SR) for current order
quantity.
ii. Determine the economic order quantity (EOQ).
iii. Determine the total annual cost for the EOQ
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