Redraw Figure 20.7 assuming that carrying costs are $60 a ton and that each order involves a
Question:
Redraw Figure 20.7 assuming that carrying costs are $60 a ton and that each order involves a fixed charge of $400.
a. What is the optimal order quantity?
b. Using your plot from part (a), about how many orders should the firm place a year?
c. What is the average size of the firm's inventory?
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1259722615
9th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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