Solution-What are the relevant costs to be considered

What are the relevant costs to be considered

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Reference no: EM133079633

Problem - Material Accounting - Warriors Company sells Product XXX. Currently, the company is not implementing any Inventory Control Tools to manage its inventory costs. When ordering Item XXX from the supplier, the company spends P300 each order. The supplier sells the item to Warriors Company at P500 each item. Holding cost for each unit amounts to 20% of the Cost of Item XXX. The company requires 20,000 units of XXX annually. Currently, Warriors Company orders 300 units every time it orders.

1. In this problem, what are the relevant costs to be considered in the computation of EOQ? How are these costs considered in the computation of EOQ?

2. How much is the current total cost of carrying and cost of ordering of the company?

3. How many times in a year should the company order in order to reduce inventory costs?

4. What is the Company's EOQ?

5. For how much will the company save if EOQ is implemented?

6. How will just in Time system help Warriors Company?

Reference no: EM133079633

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What are the relevant costs to be considered

Reference no: EM133079633

Reference no: EM133079633

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