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The following inventory data have been established for the Thompson Company: Annual sales are 338,000 units and orders must be placed in multiples of 100
- The following inventory data have been established for the Thompson Company:
- Annual sales are 338,000 units and orders must be placed in multiples of 100 units.
- The purchase price per unit is KES 600 and carrying cost is 20% of the purchase price of goods.
- Fixed order cost is KES 4,800.
- Three days are required for delivery while one year has 300 working days.
Required:
- How many orders should Thompson Company place each year?
- At what inventory level should an order be made?
- Calculate the total cost of ordering and carrying inventories if the order quantity is EOQ.
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