What is the annual cost of ordering and carrying tea

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Reference no: EM13841058

A grocery store carries a particular brand of tea that has the following characteristics:

Sales = 8 cases per week

Ordering cost = $10 per order

Carrying charge = 20 percent per year

Item cost = $80 per case

a. How many cases should be ordered at a time?

b. How often will tea be ordered?

c. What is the annual cost of ordering and carrying tea?

d. What factors might cause the firm to order a larger or smaller amount than the EOQ?

Reference no: EM13841058

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