Question
Decor Ltd has the following figures regarding its inventory: Cost price per unit NS50 per unit Storage cost per unit per year N$5 per
Decor Ltd has the following figures regarding its inventory: Cost price per unit NS50 per unit Storage cost per unit per year N$5 per unit Weekly demand (usage) 2 000 units Normal delivery time 2.5 weeks Insurance cost per unit per year NS5 per unit Interest rate 9% Ordering cost for 2 orders NS80 Safety stock 5 000 units There are 50 normal working weeks per year, and four weeks in one month. REQUIRED: 3.1.1 Calculate the economic order quantity (EOQ) 3.1.2 Calculate the number of orders per year 3.1.3 Determine the ordering cost per year 3.1.4 Determine the total inventory cost for the year
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Step: 1
aTo calculate the Economic order Quantity EOQ we use the formula EOQ 2DSH Where D ...Get Instant Access to Expert-Tailored Solutions
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Management and Cost Accounting
Authors: Alnoor Bhimani, Charles T. Horngren, Srikant M. Datar, George Foster
4th edition
1405888202, 978-0273711490, 273711490, 978-1405888202
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