Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The Purchasing Manager of Pelham Toys purchases $300,000 of inventory every year. Each piece of inventory costs $3.00 to buy from the supplier. In addition,
The Purchasing Manager of Pelham Toys purchases $300,000 of inventory every year. Each piece of inventory costs $3.00 to buy from the supplier. In addition, the manager did an activity-based costing study and found that each order she places costs her $25.00 and each item costs $5.00 per year in stocge 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) What is the total annual cost (in dollars) of placing orders? (round your answer to zero decimal places) in 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: What is the order quantity that is most economical for the company (EOQ)? fround your answer to zero decimal places) i How many orders would the Purchasing Manager place in a year? fround your answer to zero decimal places) i What is the total annual cost in dollars) of placing orders? (round your answer to zero decimal places) li What is the total annual cost (in dollars) of carrying inventory? round your answer to zero decimal places)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started