Question: Economic order quantity for retailer. Fan Base (FB) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It

Economic order quantity for retailer. Fan Base (FB) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory decisions for its Los Angeles Galaxy soccer jerseys product line. This is a highly popular item. Data for 2009 are:

Expected annual demand for Galaxy jerseys 10,000 Ordering cost per purchase order

Each jersey costs FB $40 and sells for $80. The $7 carrying cost per jersey per year comprises the required return on investment of $4.80 (12% x $40 purchase price) plus $2.20 in relevant insurance, handling, and theft-related costs. The purchasing lead time is 7 days. FB is open 365 days a year

1. Calculate the EOQ.

2. Calculate the number of orders that will be placed each year

3. Calculate the reorderpoint

Expected annual demand for Galaxy jerseys 10,000 Ordering cost per purchase order $200 Carrying cost per year $7 per jersey

Step by Step Solution

★★★★★

3.54 Rating (178 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Economic order quantity for retailer 1 2 3 D 10000 P 200 C 7 E... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

24-B-C-A-C-P-A (244).docx

120 KBs Word File

Students Have Also Explored These Related Cost Accounting Questions!

Fan Base (FB) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now consider ing inventory decisions for its Los Angeles Galaxy...

Fan Base (FB) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory decisions for its soccer jerseys product...

Wonder Line (WL) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory decisions for its Los Angeles Galaxy...

3 XYZ Company needs 1,000 motors in its manufacture of automobiles. It can buy the motors from ABC for $1,250 each. XYZ's plant can manufacture the motors for the following costs per unit: Direct...

20-16 Economic order quantity for retailer. Fan Base (FB) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory...

The following information pertains to Shanes Sports Collections Limited (SSCL): The tax rate is 40%. SSCL ended 20X5 with 700,000 common shares outstanding, after issuing 200,000 common shares for...

21-21. ECONOMIC ORDER QUANTITY FOR RETAILER. Wonder Line (WL) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering...

(0) 21-21. ECONOMIC ORDER QUANTITY FOR RETAILER. Wonder Line (WL) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering...

21-21. ECONOMIC ORDER QUANTITY FOR RETAILER. Wonder Line (WL) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering...

Discuss the First Amendment, and how it protects commercial speech. What are its limitations?

An incomplete subsidiary ledger of wire cable for July is as follows: a. Complete the materials issuances and balances for the wire cable subsidiary ledger. Apply a FIFO inventory flow assumption....

Please please please help me with my final exam, I need it to be 1 0 0 % correct, these are 3 questions. I really really appreciate your help! Thank you so much! 3 Lenci Corporation manufactures and...

Consider a CMOS process for which Lmin = 0.25 m, tox = 6 nm, n 460 cm2/V . s, and V; %3| 0.5 V. (a) Find Cox and k', (b) For an NMOS transistor with W/L = 15 um/0.25 um, calculate the values of Voy ,...

On 2 September, a 90-day bill issued with a maturity of 1 December had a quoted price of $92. One 2 October (i.e. 30 days passed), the price was $92.50. Assume the bill face value is $1mil. Suppose...

Assuming the cost of an associate leaving within 90 days is $3,000, what will be your facility's approximate cost of early turnover for this year? Year-to-Date Turnover Avg. Head- count Total

Once you have completed your financial analysis, interpret the ratios and vertical and horizontal analyses to evaluate the business performance of Lueders Medical Clinic. In your brief, make sure to...

W.W. Grainger and McMaster-Carr: MRO Suppliers W.W. Grainger and McMaster-Carr sell maintenance, repair, and operations (MRO) products. Both companies have catalogs and web pages through which orders...

The closo-borane with the formula B 6 H 6 2 has the six B atoms at vertices, forming an octahedron structure with eight faces. The formula for the number of sides is 2n - 4, where n is the number of...

Cash budgets must be prepared before the operating income budget. Do you agree? Explain

Ethics and pricing. Apex Art has been requested to prepare a bid on 500 pieces of framed artwork for a new hotel. Winning the bid would be a big boost for sales representative Jason Grant, who works...

Value engineering, target pricing, and locked-in costs. Pacific Dcor, Inc., designs, manufactures, and sells contemporary wood furniture. Ling Li is a furniture designer for Pacific. Li has spent...

Operation Costing. Whole Goodness Bakery needs to determine the cost of two work orders for the month of June. Work order 215 is for 1,200 packages of dinner rolls and work order 216 is for 1,400...

You just borrowed money from your credit Union with the following terms. 3 years from today, you will payback $2,499, in 7 years from today, you will receive $2,381 from your credit union on the same...