Knights Corporation, a leader in residential property management within the Phoenix, AZ area, uses a key supplier
Question:
Knights Corporation, a leader in residential property management within the Phoenix, AZ area, uses a key supplier for preventative maintenance needs. The company buys regular bleach in bulk, but wants to determine the best order quantity to limit Total Annual Inventory cost for the product. Using the information below, determine the following:
Notation | Amount/Quantity | Units | |
Annual Demand | D | 7200 | Gallons |
Order Cost | K | $20 | Dollars |
Holding Rate | i | 20% | |
Product Cost | c | $1.25 | Dollars |
Open days per year | 360 | Days |
What is the EOQ for bleach? (round up to whole number)
Question 2
What is the annual purchase cost (how much does the company spend in bleach each year)? (2 decimal places)
Question 3
What is the holding cost of bleach? (2 decimal places)
Question 4
What is the ordering cost of bleach? (2 decimal places)
Question 5
Using only the holding cost and ordering cost of bleach, what is the total annual inventory cost of the product? (2 decimal places)
Question 6
How many orders for bleach per year does Knights place?
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer