Why might a firm keep a safety stock? What effect is it likely to have on carrying cost of inventory?
Answer to relevant QuestionsWhat does the EOQ formula tell us? What assumption is made about the usage rate for inventory?Oral Roberts Dental Supplies has annual sales of $5,200,000. Ninety percent are on credit. The firm has $559,000 in accounts receivable. Compute the value of the average collection period.Diagnostic Supplies has expected sales of 84,100 units per year, carrying costs of $5 per unit, and an ordering cost of $10 per order.a. What is the economic order quantity?b. What is the average inventory? What is the total ...Dome Metals had credit sales of $180,000 yearly. Dome offered a 3 percent discount for payment in 18 days. What would the average receivables balance be?List five different financial applications of the time value of money.
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