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If D = 500,000 units per year, C = 40 percent of acquisition cost per unit per year, S = $59.50 per order, and ac = $5.50 per unit:
Problem a) What is the EOQ?
Problem b) What is the TSC at the EOQ?
Problem c) How much would the TSC increase if the order quantity must be 6,000 units because of a standard shipping-container size?
Problem d) Name and describe four costs that are reduced by holding inventory
Problem e) Name and describe seven costs that are increased by holding inventory
Problem f) Compare and contrast fixed order quantity inventory systems with fixed order period inventory system
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Computation of Free Cash Flow
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