Question
Sam Company is a retailer of real wood flooring. It buys and sells 20,000 packs of flooring each year from its supplier Frank Company. The
Sam Company is a retailer of real wood flooring. It buys and sells 20,000 packs of flooring each year from its supplier Frank Company. The real wood flooring from Frank Company costs OMR 35 per pack. There is an order processing charge of OMR 150 per order, irrespective of the number of packs ordered, and Frank Company takes 10 days to deliver the wood flooring. The average cost of holding one pack of real wood flooring for one year is OMR 9. Now, Sam Company has another option from Dona Company. A new supplier of real wood flooring, Dona Company, has offered Sam Company wood flooring on slightly different terms. Dona Company guarantees that its wood will never arrive damaged since it uses special packaging designed for maximum protection. It charges OMR 34.95 per pack for the flooring. There is an order processing charge of OMR 160 per order, irrespective of the number of packs ordered, and Dona Company takes 7 days to deliver the goods. The average cost of holding one pack of Dona Company real wood flooring for one year is OMR 12. This is because of special packaging takes up additional storage space. d 28 out of ABC Analysis is useful for analyzing the inventories: a. Based on their Quality and usage b. All of the given options c. Based on their cost composition and value d. Based on Physical Volume ed 29 out of n EOQ is the quantity that minimizes a. Safety Stock Level b. Total Inventory Cost c. Total Interest Cost d. Total Ordering Cost on 30 t red d out of 9 tion The companies are using the EOQ in managing the inventory, what is the main objective of that? a. To minimize the total ordering cost b. To minimize the total inventory cost c. To minimize the safety stock level d. To minimize the total Interest cost
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