Question: A certain store sells Sun Devil Baseball Caps (Style 101). They sell, on average, 90 of those caps per week during their 52 week fiscal

A certain store sells Sun Devil Baseball Caps (Style 101). They sell, on average, 90 of those caps per week during their 52 week fiscal year. The Unit cost for a cap is $11.70. All ordering costs, transportation, tracking, processing, stocking, etc. amounts to $54 per order. Annual holding costs are 27% of the unit cost. A. Currently the lot-size this store uses is 1500. What is their AHC? What is their AOC? What is their TC? Without calculating EOQ, is their present lot-size smaller or larger than the EOQ? B. Which order size will provide the lowest Total annual inventory cost? C. Using EOQ, what would the avg. time between orders be? D. How much do they stand to save annually in Total annual inventory costs if they use EOQ versus the present lot-size of 1500?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

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

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!