Find the current total annual inventory cost

Reference no: EM1346346

Novelty Gifts is experiencing some inventory control problems. The manager currently orders 10,000 units four times each year to handle annual demand of 40,000 units. Each order costs $15 and each unit costs $1.50 to carry. She maintains a stock of 200 units.

a) What is the current total annual inventory cost?
b) Calculate the economic ordering qty (EOQ)
c) What is the average inventory under EOQ if she maintains a safety stock of 200 units?
d) Calculate the total annual inventory costs under EOQ. How does this compare to her current inventory costs?

Reference no: EM1346346

Questions Cloud

Intercultural communication - studying cultures : Intercultural report written for colleagues about to embark on business meetings in a new country such as Brazil or Turkey.

Explain what is the tension in each wire : A wrench 0.3 meters long lies along the positive y-axis, and grips a bolt at the origin. A force is applied in the direction of langle 0, 1, 2rangle at the end of the wrench. Find out the magnitude of the force in newtons needed to give 100 newton..

Multiple choice questions based on asset management : Shanklin Company buys merchandise on terms of 2/15, net 40, & its total gross buys are $800,000 per year. Find the maximum amount of costly trade credit.

Discuss any interaction between the proton and electron : A pair of oppositely charged parallel plates are separated by a distance of 5 cm with a potential difference of 550 V between the plates. A proton is released from rest at the positive plate at the equal time that an electron is released from rest..

Find the current total annual inventory cost : Novelty Gifts is experiencing some inventory control problems. The manager currently orders 10,000 units four times each year to handle annual demand of 40,000 units.

Show the important features of a project communication plan : Contemporary thoughts on communication - Explain the important features of a project communication plan and considerations for implementation.

How far would a point on the edge of the wheel : A total of 34 bright and 34 dark Newton's rings (not counting the dark spot at the center) are observed as 550 -nm light falls normally on a planoconvex lens resting on a flat glass surface. How much broad is the center than the edges.

Prepare balance sheet for manning style : Anna spent two thirds of her instance sewing dresses, and the other third of her time doing administrative work. Prepare Balance Sheet for Manning Style.

Calculate intrinsic value of a share : Calculate intrinsic value of a share if FCFE = $13,000, shares outstanding= 1300, total debt= 40,000, future growth rate in FCFE = 5.6%,

User Account

All Pages