Consider a store that buys a chocolate and caramel candy bar for $1 (the bar is...

 

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Consider a store that buys a chocolate and caramel candy bar for $1 (the bar is then sold at retail for $1.50). Annual demand is 5,000 bars, the carrying rate is 20 percent, and the order cost is $10 per order. Currently the store orders the candy in quantities of 1,000 per order. a. calculate the annual inventory cost on this policy b. calculate the economic order quantity for this item c. calculate the inventory cost if the EOQ is used. Consider a store that buys a chocolate and caramel candy bar for $1 (the bar is then sold at retail for $1.50). Annual demand is 5,000 bars, the carrying rate is 20 percent, and the order cost is $10 per order. Currently the store orders the candy in quantities of 1,000 per order. a. calculate the annual inventory cost on this policy b. calculate the economic order quantity for this item c. calculate the inventory cost if the EOQ is used.

Answer rating: 100% (QA)

a To calculate the annual inventory cost on the current ordering policy we need to consider the carr... View the full answer