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The Purchasing Manager of Pelham Toys purchases $300,000 of inventory every year. Each pie inventory costs $3.00 to buy from the supplier. In addition, the
The Purchasing Manager of Pelham Toys purchases $300,000 of inventory every year. Each pie inventory costs $3.00 to buy from the supplier. In addition, the manager did an activity based study and found that each order she places costs her $25.00 and each item costs $5.00 per ye storage costs. She orders 2,000 units every time she places an order. A. Under the current inventory management system, i How many orders does the Purchasing Manager place in a year? (round your answer to zero decimal places) ii What is the total annual cost (in dollars) of placing orders? (round your answer to zero decimal places) iii What is the total annual cost (in dollars) of carrying inventory? (round your answer to zero decimal places) B. If she based her purchasing pattern on the Economic Order Quantity (EOQ) model: i What is the order quantity that is most economicls for the company (EOQ)? (round your answer to zero decimal places) i How many orders would the Purchasing Manager place in a year? (round your answer to zero decimal places) ii What is the total annual cost (in dollars) of placing orders? (round your answer to zero decimal places) jii What is the total annual cost (in dollars) of carrying inventory? (round your answer to zero decimal places)
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