ABC Furniture sells 2,400 sofas a year at an average price per sofa of $1,250. The carrying
Fantastic news! We've Found the answer you've been seeking!
Question:
ABC Furniture sells 2,400 sofas a year at an average price per sofa of $1,250. The carrying cost per unit is $11.60. The company orders 80 sofas at a time and has a fixed order cost of $52 per order. The sofas are sold out before they are restocked.
- What are the total number of orders in a year?
- What is the total carrying cost?
- What is the total restocking cost? Note: restocking cost is same as shortage cost.
- What are the total costs?
- Should the company increase or decrease its number of orders and the quantity it orders each time?
- What is the economic order quantity (EOQ)?
- How many orders will company place if it follows the EOQ model?
Related Book For
Posted Date: