Question
A local distributor for a national tire company expects to sell approximately 10,000 steel-belted radial tires of a certain size and tread design next year.
- A local distributor for a national tire company expects to sell approximately 10,000 steel-belted radial tires of a certain size and tread design next year. Annual carrying cost is $25 per tire, and ordering cost is $100. The distributor operates 288 days a year.
a. What is the EOQ? b. How many times per year does the store reorder? c. What is the length of an order cycle? d. What is the total annual cost if the EOQ quantity is ordered?
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Fundamentals of Corporate Finance
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
3rd edition
1118845897, 978-1118845899
