Inventory costs can be categorized as the costs incurred for holding the inventory, the costs of...
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Inventory costs can be categorized as the costs incurred for holding the inventory, the costs of ordering and receiving the inventory, and the cost of running out of inventory. costs relate to the placing and receiving of orders for inventory. The number of units in the optimal size order is called the economic ordering quantity (EOQ). Graham Company purchases custom-made durable packing boxes to ship its equipment. Each year, Graham uses 70,000 boxes. It costs Graham $42 to place each order, and the purchase price is $1.92 per box. An analysis indicates that carrying costs are 25% of the purchase price. Based on the information provided, solve for the values under Graham's EOQ policy in the following table. EOQ for packing boxes Number of orders per year Total ordering cost for the year Total carrying cost for the year Total inventory cost per year Value Inventory costs can be categorized as the costs incurred for holding the inventory, the costs of ordering and receiving the inventory, and the cost of running out of inventory. costs relate to the placing and receiving of orders for inventory. The number of units in the optimal size order is called the economic ordering quantity (EOQ). Graham Company purchases custom-made durable packing boxes to ship its equipment. Each year, Graham uses 70,000 boxes. It costs Graham $42 to place each order, and the purchase price is $1.92 per box. An analysis indicates that carrying costs are 25% of the purchase price. Based on the information provided, solve for the values under Graham's EOQ policy in the following table. EOQ for packing boxes Number of orders per year Total ordering cost for the year Total carrying cost for the year Total inventory cost per year Value
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Answer rating: 100% (QA)
SOLUTION To solve for the values under Grahams EOQ policy we need to calculate the EOQ number of orders per year total ordering cost for the year total carrying cost for the year and total inventory c... View the full answer
Related Book For
Statistics Data Analysis And Decision Modeling
ISBN: 9780132744287
5th Edition
Authors: James R. Evans
Posted Date:
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