Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Tim is a purchasing agent for computer store and has recently added a new computer model to store's catalog. Current sales are running at about

Tim is a purchasing agent for computer store and has recently added a new computer model to store's catalog. Current sales are running at about 13 computers per week. Time purchases the computer directly from the manufacturer at a unit cost of $ 3000 and the shipments take about a week to arrive. Tim routinely uses EOQ model to determine the stock level and buying frequency. He has estimated that his inventory carrying cost is 20% and ordering cost is $ 75 per order. a. Currently, Tim is ordering 26 models per order; what would be his ordering frequency and what is total cost to him. b. Is this consistent with the EOQ model? If not, what should he be ordering; what's lot size, how frequently should he order and what's annual inventory cost

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Casebook On General Management In Asia Pacific

Authors: Dominique Turpin, Xiaobai Shen

1st Edition

0333717910, 978-0333717912

More Books

Students also viewed these General Management questions

Question

=+DJIA on different days of the week? Explain.

Answered: 1 week ago