Question: You are interested in calculating the optimal order quantity for an item. The item is valued at $300 and your accountants indicate that your yearly

You are interested in calculating the optimal order quantity for an item. The item is valued at $300 and your accountants indicate that your yearly carrying cost is 30% of the item value. Demand for the item averages 300 units a quarter (a quarter is 13 weeks of a 52-week year). The fixed cost associated with placing each order is $50. How many units should be ordered each time?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!

On March 1, Derby Corporation (a U.S.-based company) expects to order merchandise from a supplier in Norway in three months. On March 1, when the spot rate is $0.10 per Norwegian krone, Derby enters...

8.8. The daily demand for an item is distributed normally, with a mean of 5 and a variance of 2. The cost to place an order is $10, and the carrying charge per day is estimated at 10 percent of the...

MBA 280 Fall 2017 Inventory Management Time Frame: Class 5 - Class 6 References: Operations Management Reading: Managing Inventory Simulation: Root Beer Game Played in Class 6, Oct 5th, Check Saclink...

U.S. Copyright Law (title 17 of U.S. code) governs the reproduction and redistribution of copyrighted material. Downloading this document for the purpose of redistribution is prohibited. Chapter 15...

Question 1 (4+5+6=15 points) - EOQ model The ABC is a manufacturing company that produces a range of household appliances, including four different models of refrigerators. One of the critical...

Hello, need help with the following scenario and questions. Kindly provide explanation of how the process works. Thank you. Utilize this data: The accountant was going over last fiscal year's sales...

2 1. (15 marks) A large electrical parts retailer estimates that the demand for a certain type of circuit breaker is 2500 units per year. The costs associated with placing an order for these circuit...

2. What is the EOQ and reorder point with safety stock for Strike Disinfectant given your answer to question 1? 3. Compute the total order and inventory-holding costs for a fixed-quantity system...

8. Recommend a price and marketing strategy for the established automobile manufacturer seeking to enter the market for specialist competition motorcycles. Compare your recommendations to those for...

1. (30 points) Remin sells chocolate on Hagwarts Express to fend off dementors. She uses the newsvendor model to order a special kind of white chocolate (in bars) every month. One bar costs $4 to the...

A firm has an equity beta of 1.2,the risk free rate is 3.4 percent, the market return is 15.7 percent and the pretax cost of debt is 0.4 percent. the debt equity ratio is.47. if you apply the common...

Typographical errors in the Daily Times Mirror occur at an average rate of .4 per page. (The errors are random and independent.) Use the Poisson distribution to determine the probability of fnding no...

Recording municipal bond interest received in the general ledger will generate a difference. Select the best term to complete the sentence. permanent temporary

When older adults have difficulty with transportation and communication, or may be reluctant to request needed assistance to which they are entitled, they may be in need of: Group of answer choices...