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Amaron Products currently begins each sales cycle with 1,186,913 units in stock. This stock is depleted at the end of each sales cycle and then
Amaron Products currently begins each sales cycle with 1,186,913 units in stock. This stock is depleted at the end of each sales cycle and then reordered. The firm currently places 2.29 orders per year The carrying cost per unit is $0.17 per year and the fixed order cost is $20,000 per order. Assuming there is no shortage cost for this firm. The average cost of each unit of inventory is $14.01.
Beginning inventory = 1,186,913 units | |||||||||||||||||||||||
Ending inventory = 0 Units | |||||||||||||||||||||||
# Orders per year = 2.29 orders | |||||||||||||||||||||||
Carrying cost / unit = $ 0.17 per year | |||||||||||||||||||||||
Fixed order cost = $20,000 per order | |||||||||||||||||||||||
Average Inventory cost per unit = $14.01 per units
| $14.01 | per unit |
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