Annually a company requires 45,000 units of one of its components that it distributes throughout the country and its inventory maintenance cost is 10% of the cost of the product. The cost of the product is 2000 per unit. The cost to order is $ 125,000. Based on the above data, determine: 1. The economic quantity of the order 2. If 10 days have elapsed since placing the order. What is the reorder point if the safety inventory is 1500 units? 3. Quantity of the order to be made? 4. What is the total cost of inventory management?
Annually a company requires 45,000 units of one of its components that it distributes throughout the country and its inventory maintenance cost is 10% of the cost of the product. The cost of the product is 2000 per unit. The cost to order is $ 125,000. Based on the above data, determine: 1. The economic quantity of the order 2. If 10 days have elapsed since placing the order. What is the reorder point if the safety inventory is 1500 units? 3. Quantity of the order to be made? 4. What is the total cost of inventory management?
Chapter15: Managing Short-term Assets
Section: Chapter Questions
Problem 15PROB
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Annually a company requires 45,000 units of one of its components that it distributes throughout the country and its inventory maintenance cost is 10% of the cost of the product. The cost of the product is 2000 per unit. The cost to order is $ 125,000. Based on the above data, determine:
1. The economic quantity of the order
2. If 10 days have elapsed since placing the order. What is the reorder point if the safety inventory is 1500 units?
3. Quantity of the order to be made?
4. What is the total cost of inventory management?
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