The monthly demand of GHI's sole product is 30,000 cases. Based on data analysis, the carrying cost per case is P30 per year. For each order, ABC spends an average of P200 in worker's wages, P700 in freight and P560 in other expenses. If ABC would like follow the EOQ model but also maintain a safety stock of 10,000 cases, how much would the total annual inventory-related costs be?
The monthly demand of GHI's sole product is 30,000 cases. Based on data analysis, the carrying cost per case is P30 per year. For each order, ABC spends an average of P200 in worker's wages, P700 in freight and P560 in other expenses. If ABC would like follow the EOQ model but also maintain a safety stock of 10,000 cases, how much would the total annual inventory-related costs be?
Chapter18: The Management Of Accounts Receivable And Inventories
Section: Chapter Questions
Problem 19P
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The monthly demand of GHI's sole product is 30,000 cases. Based on data analysis, the carrying cost per case is P30 per year. For each order, ABC spends an average of P200 in worker's wages, P700 in freight and P560 in other expenses.
If ABC would like follow the EOQ model but also maintain a safety stock of 10,000 cases, how much would the total annual inventory-related costs be?
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