What is the amount of average inventory

Assignment Help Financial Management

Reference no: EM131604038

The Medical Corporation of America has developed a new type of body temperature thermometer. The company expects to increase its sales by 25% over the past year due to this new development. Last year's sales were $150,000 at a selling price of $100 per unit. A safety stock of 35 units has eliminated stockouts. The manager would like to cut costs as much as possible and decided to implement the EOQ inventory management system in order to minimize the total costs of inventory. The cost of warehouse space is $2.5 per unit. Inventory handling expense is $1.50 per unit, and inventory insurance premium is $1.00 per unit. Ordering cost is $100 per order. (PLEASE SHOW YOUR WORK).

a) What is the economic order quantity?

b) What is the amount of average inventory?

c) How many orders will be made per year?

d) What is the total cost of this inventory decision?

Reference no: EM131604038

Questions Cloud

Techniques of foreign exchange risk management : Critically discuss the importance and techniques of foreign exchange risk management and evaluate the basic hedging strategies involved.

Discuss are subcultures in police work inevitable : What steps might you take, as a police administrator, to prevent this from occurring

How are instructions represented at machine level assembler : How are the instructions represented at the machine level assembler? How are these instructions executed in a classical von Neumann machine?

Design and create an interactive data visualization : Develop and document the process of creating clear and effective visual representations for a topic of your choice - Design and create an interactive data visualization

What is the amount of average inventory : The Medical Corporation of America has developed a new type of body temperature thermometer. What is the amount of average inventory?

How do you see this being applied in your workplace : Nurses in various settings are adopting a research-based (or evidence-based) practice that incorporates research findings into their decisions.

Uses no debt-it is unleveraged : Once Bitten Corp. uses no debt (it is "unleveraged"). The weighted average cost of capital is 10 percent. what is EBIT?

Find the value of g if f is increasing in given interval : Let f be a function with f(x) > 0 for all x. Set g = 1/f. If f has a local maximum at x1, what about g?

Explain ethnic populations and their treatment : What are some current social cultural issues that are directly affecting the LGBT community and various ethnic populations and their treatment

User Account

All Pages