Inventory must be managed carefully. Your firm has the following data regarding inventory: Carrying costs/unit/week ........................................................$.02 Average

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Inventory must be managed carefully. Your firm has the following data regarding inventory:

Carrying costs/unit/week ........................................................$.02

Average monthly inventory .......................................10,000 units

Cost per order .......................................................................$5,000

Average Daily Sales ...................................................................225

How often must this firm re-order inventory and what is the optimal quantity if we assume that sales are not seasonal?

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Cost management a strategic approach

ISBN: 978-0073526942

5th edition

Authors: Edward J. Blocher, David E. Stout, Gary Cokins

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