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what am i doing wrong? Logan Distributing Company of Atlanta sells fans and heaters to retail outlets throughout the Southeast. Joe Logan. the president of

what am i doing wrong?
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Logan Distributing Company of Atlanta sells fans and heaters to retail outlets throughout the Southeast. Joe Logan. the president of the company, is thinking about changing the firm's credit policy to attract customers away from competitors. The present policy calls for a 1/10, net 30 cash discount. The new policy would call for a 3/10, net 50 cash discount Currently, 30 percent of Logan customers are taking the discount, and it is anticipated that this number would go up to 50 percent with the new discount policy. It is further anticipated that annual sales would increase from a level of $392,500 to $600,000 as a result of the change in the cash discount policy. The increased sales would also affect the inventory level. The average inventory carried by Logan is based on a determination of an EOQ. Assume sales of fans and heaters increase from 14,865 to 22,400 units. The ordering cost for each order is $205, and the carrying cost per unit is $1.45 (these values will not change with the discount, The average inventory is based on EOQ/2. Each unit in inventory has an average cost of $12. Cost of goods sold is equal to 65 percent of net sales: general and administrative expenses are 15 percent of net sales; and interest payments of 14 percent will only be necessary for the increase in the accounts receivable and inventory balances. Taxes will be 40 percent of before-tax income For average collection period, assume the customer pays on the last day possible (if they are getting the discount that is day 10; if not, that is day 30 with the original policy and day 50 with the proposed policy). What is the EOQ prior to the change? What is the EOQ after the change? What was the average inventory prior to the change? What is the average inventory after the change? After 99,200 Before Saks = 14845 ordering cost 2015 Carrying cost 1.45 EOQ=12 xAXO 2x 14805 X 905 Upaluso LOQ 4203206.897 - poso, itu Avg inventory Before 1095u Joso- 2 1085X 12 2300 2 x 32,400 x 305-9184000-6333703.12 lus 1.45 200 2516.7 2517 1958u Ang inventury after 1259x12 15108 What am I doing weong

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