Reference no: EM132610250
Questions -
Q1) Using the EOQ mode, Apple Baby Corporation computed the economic order quantity for one of the products it sells to be 4,000 units. Apple Baby Corporation maintains safety stock of 300 units. The quarterly demand for product 10,000 units. The order cost is P200 per order. The purchase is 10,000 units. The order cost is P200 per order. The price of the product is P2..40
The company sells at a 100% markup. The annual inventory carrying cost of 25% of the average inventory level.
A) What is the annual inventory carrying cost?
B) What is the total inventory order cost per year?
Q2) Bank Drugs sells Jami Michelle lipstick. The Jami Michelle Company offers a 6% discount on orders of at least 500 tubes, a 10% discount on orders of at least 1,000 tubes, a 12% discount on orders of at least 1,800 tubes and a 15% discount on orders at least 2,500 tubes.
Bank sells an average of 40 tubes of Jami Michelle lipstick weekly. The normal price paid by Bank drugs is $1 per tube. If it costs Bank $30 to place an order, and Bank's annual holding cost rate is 27%, determine the optimal order policy for Bank Drugs.
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