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EOQ and inventory cost. Horthern Appliance store sells about 375 console model 25-inch televsion sets per year. The price of the sets is $800 and the unit cost the store $600 each. Cost of ordering are $125 per order and carrying costs are 25 percent of unit cost, comprised mostly of insurance and financing costs for inventory. Required: a) Compute the economic order Quantity b) Compute the total cost of the inventory

EOQ and inventory cost. Horthern Appliance store sells about 375 console model 25-inch televsion sets per year. The price of the sets is $800 and the unit cost the store $600 each. Cost of ordering are $125 per order and carrying costs are 25 percent of unit cost, comprised mostly of insurance and financing costs for inventory. Required: a) Compute the economic order Quantity b) Compute the total cost of the inventory

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints
Section: Chapter Questions
Problem 8E: Melchar Company uses 78,125 pounds of oats each year. The cost of placing an order is 18, and the...
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EOQ and inventory cost. Horthern Appliance store sells about 375 console model 25-inch televsion sets per year. The price of the sets is $800 and the unit cost the store $600 each. Cost of ordering are $125 per order and carrying costs are 25 percent of unit cost, comprised mostly of insurance and financing costs for inventory.

Required:

a) Compute the economic order Quantity

b) Compute the total cost of the inventory

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