ELLA T., Inc. has annual sales of 5,400 units; management decides to establish the EOQ model. The firm has two possible suppliers:   Supplier A Shipping costs $1,000   Per-unit carrying costs $70 Supplier B Shipping costs $900   Per-unit carrying costs $81   What is the EOQ for each supplier? Round your answers to the nearest whole number. Supplier A:   units Supplier B:   units If the firm establishes a safety stock of 108 units, what is the firm's average inventory for both suppliers? Use the rounded value from the previous question. Round your answers to the nearest whole number. Supplier A:   units Supplier B:   units What will be the firm's expected maximum and minimum inventory with each supplier? Use the rounded value from the previous questions. Round your answers to the nearest whole number.     Units   Minimum Maximum Supplier A:     Supplier B:       If delivery takes nine days, what should be the firm's level of inventory when it places an order with supplier A? Assume 365 days in a year. Round your answer to the nearest whole number.   units

Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter7: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 46E: Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is...
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ELLA T., Inc. has annual sales of 5,400 units; management decides to establish the EOQ model. The firm has two possible suppliers:

 

Supplier A Shipping costs $1,000
  Per-unit carrying costs $70
Supplier B Shipping costs $900
  Per-unit carrying costs $81

 

  1. What is the EOQ for each supplier? Round your answers to the nearest whole number.

    Supplier A:   units

    Supplier B:   units

  2. If the firm establishes a safety stock of 108 units, what is the firm's average inventory for both suppliers? Use the rounded value from the previous question. Round your answers to the nearest whole number.

    Supplier A:   units

    Supplier B:   units

  3. What will be the firm's expected maximum and minimum inventory with each supplier? Use the rounded value from the previous questions. Round your answers to the nearest whole number.

     

      Units
      Minimum Maximum
    Supplier A:    
    Supplier B:    

     

  4. If delivery takes nine days, what should be the firm's level of inventory when it places an order with supplier A? Assume 365 days in a year. Round your answer to the nearest whole number.

      units

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