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Higgins Athletic Wear has expected sales of 22,500 units a year, carrying costs of $1.50 per unit, and an ordering

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Higgins Athletic Wear has expected sales of 22,500 units a year, carrying costs of $1.50 per unit, and an ordering cost of $3.00 per order.
a. What is the economic order quantity?
b. What is average inventory? What is the total carrying cost?
c. What is the total inventory cost?
d. Assume an additional 30 units will be required as safety stock. What will the new average inventory be? What will the new total carrying cost be?

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Diagnostic Supplies a b EOQ 2 300 2 150 units average inv…View the full answer


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Foundations of Financial Management

ISBN: 978-1259024979

10th Canadian edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta

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Question Details
Chapter # 7- Current Asset Management
Section: Problems
Problem: 36
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Question Posted: September 14, 2018 13:04:38
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