Meyer Stores carries a specialty line of flavored syrups. One of the most popular of these is
Question:
Meyer Stores carries a specialty line of flavored syrups. One of the most popular of these is raspberry syrup which sells, on average, 30 bottles per week. Meyer’s cost is $8 per bottle. Meyer has determined its order cost to be $50 and inventory carrying cost is 20%. Meyer is open for business 52 weeks per year. What is the EOQ for raspberry syrup? If Meyer orders the EOQ quantity each time, what will be the inventory turnover rate for raspberry syrup?
Step by Step Answer:
Annual demand 30 units x 52 weeks 1560 units EOQ 31225 ...View the full answer
Managing Operations Across the Supply Chain
ISBN: 978-0078024030
2nd edition
Authors: Morgan Swink, Steven Melnyk, Bixby Cooper, Janet Hartley
Related Video
Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
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