The ordering cost be by ordering at the EOQ level

Assignment Help Business Economics

Reference no: EM13984106

A produce distributor uses 1,200 packing crates a month, and each crate is purchased at a cost of $16. The manager has assigned an annual carrying cost of 20 percent of the purchase price per crate. Ordering costs are $40. Currently the manager orders once a month. c) What would the net change (with its direction) in the ordering cost be by ordering at the EOQ level? d) What would the net change (with its direction) in the carrying cost be by ordering at the EOQ level?

Reference no: EM13984106

Questions Cloud

Resulting price that consumers face with the corrective tax : The aluminum industry faces a private marginal cost curve PMC = 2Q and a market inverse-demand curve of PD = 60 – QD. However, production creates an externality with marginal damages of MD = Q. What is the resulting price that consumers face with the..

Utility maximization and optimal allocation of resources : Derive the Pareto Optimal Conditions in a perfectly competitive world of two individuals(A and B), two goods (X and Y), and two inputs (L and K): (a) Utility Maximization, (b) Optimal Allocation of Resources, (c) Economy as a whole.

The domestic central bank decreases the money supply : Explain the international interest parity concept. Then explain in words what happens to the IS and LM curves and the nominal interest rate in the domestic economy, and then its impact on the exchange rate between the domestic economy and the rest of..

Policies break with previous economic approaches : Describe the central philosophical assumptions behind Reaganomics. What were the key policies by which it was implemented? To what extent were these policies a break with previous economic approaches?

The ordering cost be by ordering at the EOQ level : A produce distributor uses 1,200 packing crates a month, and each crate is purchased at a cost of $16. The manager has assigned an annual carrying cost of 20 percent of the purchase price per crate. What would the net change (with its direction) in t..

Cost minimizing firms production function : A cost minimizing firm's production function is given by q=lk, where MPl=k and mpk=l. the price of labor services is w and the price of capital services is r. suppose you know that when w=$4 and r=$2, the firms total cost is $160. what would the cost..

Thinking of increasing products and lowering costs : William is the owner of a small pizza shop and is thinking of increasing products and lowering costs. William’s pizza shop owns four ovens and the cost of the four ovens is $1,000. Each worker is paid $500 per week. What number of workers appears to ..

Derive an expression for the marginal cost curve : The Paradise Shoes Company has estimated its weekly TVC function from data collected over the past several months, as TVC = 3450 + 20Q + 0.008Q2 where TVC represents the total variable cost and Q represents pairs of shoes produced per week. Describe ..

Firm purchases a foreign company located in another country : If a U.S. firm purchases a foreign company located in another country, the transaction is accounted for in the balance of payments as part of:

User Account

All Pages