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GreenvilleRunning provides all types of running shoes for customers who are in love with their high-end running gear. The products are high quality, with a
GreenvilleRunning provides all types of running shoes for customers who are in love with their high-end running gear. The products are high quality, with a price tag to match. As the logistics manager, however, you realize that it is still important to keep costs under control, so as to maximize the profit potential for these products. Therefore, you conduct some analysis related to inventory management NOTE: Read the questions and all information below carefully as there are many details contained in each question set-up. 1. Total Cost Inventory Carrying Costs vs Ordering Costs: One of items that GreenvilleRunning sells is their famous 1Shoes. What is the total cost per year for order cost and carrying cost for this item, given the following data? Cost per Unit $150 Average Inventory (units) 2,000 Cost per Order $2,500 Carrying Cost Number of orders per year 13 Calculate the following: a) Total Annual Order Cost b) Total Annual Inventory Carrying Cost c) Total Cost d) Is GreenvilleRunning currently operating at Yes/No the EOQ with the Shoes? 5%
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