1 2 3 4 5 6 7 8 99 10 11 12 13 14 15 16 17 18 19 20 21 B C E A museum of natural history opened a gift shop 2 years ago. Managing inventories has become a problem. Low inventory turnover is squeezing profit margins and causing cash flow problems. One of the top-selling SKUs in the container group at the museum's gift shop is a bird feeder. Sales are 18 units per week, and the supplier charges $60 per unit. The cost of placing an order with the supplier is $45. Annual holding cost is 25 percent of a feeder's value, and the museum operates 52 weeks per year. Management chose a 390-unit lot size so that new orders could be placed less frequently. What is the annual cycle-inventory cost of the current policy of using a 390-unit lot size? Would a lot size of 468 be better? Calculate the EOQ and its tital annual cycle-inventory cost. How frequently will orders be placed if the EOQ is used?

A museum of natural history opened a gift shop 2 years ago. Managing inventories has become a problem. Low inventory turnover is squeezing profit margins and causing cash flow problems. One of the top-selling SKUs in the container group at the museum's gift shop is a bird feeder. Sales are 18 units per week, and the supplier charges $60 per unit. The cost of placing an order with the supplier is $45. Annual holding cost is 25 percent of a feeder's value, and the museum operates 52 weeks per year. Management chose a 390 -unit lot size so that new orders could be placed less frequently. What is the annual cycle-inventory cost of the current policy of using a 390-unit lot size? Would a lot size of 468 be better? Calculate the EOQ and its tital annual cycle-inventory cost. How frequently will orders be placed if the EOQ is used