question archive Fisk Corporation is trying to improve its inventory control system and has installed an online system at its retail stores
Fisk Corporation is trying to improve its inventory control system and has installed an online system at its retail stores
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Fisk Corporation is trying to improve its inventory control system and has installed an online system at its retail stores. Fisk anticipates sales of 78,000 units per year, an ordering cost of $12 per order, and carrying costs of $1.30 per unit. In the second year, Fisk Corporation finds that it can reduce ordering costs to $3 per order, but carrying costs will stay the same at $1.30 per unit.
a-1. What is the economic ordering quantity for the second year?
Economic ordering quantity (EOQ)
units
a-2. How many orders will be placed during the second year?
Number of orders
a-3. What will the average inventory be for the second year?
Average inventory
units
a-4. What is the total cost of ordering and carrying inventory for second year?
Total costs $
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