Consider the following pre-merger information about a bidding firm (Firm B) and a target firm (Firm T). Assume that both firms h
1 answer:
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Answer:
a. 464 beans
b. $464
Explanation:
a. The computation of the economic order quantity is shown below:
=
where,
Annual demand = 200 days × 77 pounds = 15,400
And, all other items values would remain the same
Now put these values to the above formula
So, the value would equal to
=
= 464 beans
The average inventory would equal to
= Economic order quantity ÷ 2
= 464 units ÷ 2
= 232 units
b. Holding cost = average inventory × carrying cost per unit
= 232 units × $2
= $464