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Lou supplier sells High quality-brand batteries to fishing supplies. The annual demand is approximately 1,200 batteries. The supplier pays $28 for each battery and estimates
Lou supplier sells High quality-brand batteries to fishing supplies. The annual demand is approximately 1,200 batteries. The supplier pays $28 for each battery and estimates that the annual holding cost is 30 percent of the batterys value. It costs approximately $20 to place an order (managerial and clerical costs). The supplier currently orders 100 batteries per month.
- Determine the ordering, holding, and total inventory costs for the current order quantity.
- Determine the economic order quantity (EOQ).
- How many orders will be placed per year using the EOQ?
- Determine the ordering, holding, and total inventory costs for the EOQ. How has ordering cost changed? Holding cost? Total inventory cost?
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