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The Purchasing Manager of Toys for Us Corporation purchases $1,500,000 of inventory every year. Each piece of inventory costs $6.00 to buy from the supplier.
The Purchasing Manager of Toys for Us Corporation purchases $1,500,000 of inventory every year. Each piece of inventory costs $6.00 to buy from the supplier. In addition, the manager did an activity-based costing study and found that each order she places costs her $75.00 and each item costs $10.00 per year in storage costs. She orders 3,000 units every time she places an order. A. Under the current inventory management system, i How manv orders does the Purchasing Manager place in a year? (round your answer to zero decimal ploces) ii What is the total annual cost (in dollars) of placing orders? (round your answer to zero decimal ploces) iii What is the total annual cost (in dollars) of carrying inventory? (round your answer to zero decimal ploces) B. If she based her purchasing pattern on the Economic Order Quantity (EOQ) model: i. What is the order quantity that is most economical for the company (EOQ)? round your answer to zero decimai ploces) i How many orders would the Purchasing Manager place in a year? rouno your answer to zero decimal ploces) Wiilat is the total annual cost (in dollars) of placing orders? rouno vour answer to zero decimol ploces)
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