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EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter15: Managing Short-term Assets
Section: Chapter Questions
Problem 19PROB
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Please see imagine for question
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.
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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