Question: A store has an EOQ inventory system. The product demand is 10,000 units per year. The ordering cost is $85 per order. The store purchases
A store has an EOQ inventory system. The product demand is 10,000 units per year. The ordering cost is $85 per order. The store purchases the product for $77 per unit and sells it for $125 per unit. The unit carrying cost per year is 25% of the unit purchase cost. The supplier lead time is 12 days. Assume 350 operating days per year. The supplier offers a 2% discount if the store purchases the product quantity of 3,000 units per order.
What is the total inventory and purchase cost if the store accepts the discount offer?
You must show brief calculation steps.
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