Why can the item cost be dropped from the simple EOQ formula? Are item costs important when quantity discounts are given? Why?
Answer to relevant QuestionsWhat is the difference between a requirements philosophy and a replenishment philosophy of inventory management? Why is this difference important? The Always Fresh Grocery Store carries a particular brand of tea that has the following characteristics: Sales = 8 cases per week Ordering cost = $10 per order Carrying charge = 20 percent per year Item cost = $80 per ...The local Toyota dealer has to decide how many spare shock absorbers of a particular type to order for repairing Toyota automobiles. This shock absorber has a demand of four units per month and costs $25 each. The carrying ...A supplier has come to you and offered the following deal. If you buy 29 or fewer cases of cleaning solution, the cost will be $25 for each case. If you buy 30 or more cases, the cost will be $20 per case. Assume your cost ...A vendor has quoted a lead time of 10 weeks for the delivery of a part. Your purchasing manager says the part can be delivered in 3 weeks if necessary. Of course, the vendor disagrees. Who is correct? Explain.
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