Assume that the Samsung Galaxy smartphone has become more popular, which has increased its demand and decreased the demand for iPhones at the Verizon store in Dallas. This has caused the annual quantity sold of the iPhone to fall from 800 to 512. Assume that the annual carrying cost per unit for holding an iPhone in inventory is $40 and the order fixed cost is $10.

1. 1 The economic order quantity for the iPhone is
2. 2 The average inventory of iPhones is
3. 3 Explain the effect of this situation on the prices of the iPhone and the Samsung Galaxy.
4. 4 Explain the effect of this situation on the profits of the iPhone and the Samsung Galaxy.
5. 5 Explain the type of market structure for these two products.

Answer rating: 100% (QA)

Here Sales D 512 Cost per order C 10 Holding cost H 40 Thus EOQ EOQ 2DC VH 2512 10 40 EO... View the full answer