Sturgis Equipment builds specialty electronic components used for technology firms. Central to the components are memory...

Transcribed Image Text:

Sturgis Equipment builds specialty electronic components used for technology firms. Central to the components are memory chips needed to process data. Sturgis requires a total of 50,000 of such chips during the year and spends $150 for each order. Additionally, it pays approximately $80 for each chip and maintains a carrying cost of 20% of the item. 1. What is the total ordering cost? 2. Total Carrying cost? 3. Total Cost of Inventory (excluding cost of the item)? 4. EOQ? Sturgis Equipment builds specialty electronic components used for technology firms. Central to the components are memory chips needed to process data. Sturgis requires a total of 50,000 of such chips during the year and spends $150 for each order. Additionally, it pays approximately $80 for each chip and maintains a carrying cost of 20% of the item. 1. What is the total ordering cost? 2. Total Carrying cost? 3. Total Cost of Inventory (excluding cost of the item)? 4. EOQ?

Answer rating: 100% (QA)

To calculate the various costs and the Economic Order Quantity EOQ for Sturgis Equipment well need s... View the full answer