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Halifax Souvenir Company currently orders 500 units four times each year. Each order costs $12 and each unit costs $1.20 per year to carry.
Halifax Souvenir Company currently orders 500 units four times each year. Each order costs $12 and each unit costs $1.20 per year to carry. On average, it takes 5 days to receive an order from the supplier. Company operates 250 days per year. Required: a) What is the EOQ? b) Calculate total annual inventory cost under EOQ. c) What is the current inventory cost? d) Should the company change to EOQ system? Please explain. e) What is the re-order point?
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To calculate the Economic Order Quantity EOQ and answer the other questions well follow these steps Step 1 Calculate the EOQ Step 2 Calculate ...
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Management Accounting Information for Decision-Making and Strategy Execution
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
6th Edition
137024975, 978-0137024971
