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VARVARA [1.3K]
2 years ago
14

g An automobile dealer expects to sell 529 cars a year. The cars cost $11,000 plus a fixed charge of $500 per delivery. If it co

sts $1000 to store a car for a year, find the order size and the number of orders that minimize inventory costs.
Business
1 answer:
harkovskaia [24]2 years ago
4 0

Answer:

Order size = 23 cars

The number of orders = 23

Explanation:

The economic order quantity (EOQ) is the order size that reduces the balance of holding and ordering cost. It is to be noted that at EOQ, the carrying cost is equal to the holding cost.

The EOQ is computed as shown below;

= √ 2 × Co × D)/Ch

Co = Ordering cost

D = Annual demand

Ch = Carrying cost

EOQ = √ 2 × 500 × 529 / 1,000

EOQ = 23

Number of cars to be ordered per time, I.e optimal order size = 23

Order size = 23 cars

2. The number of times orders should be placed per year would be calculated as;

Number of orders = Annual demand / Order size

Number of orders = 529 / 23

Number of orders = 23

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8 0
3 years ago
Using the data in EA-3, assume that Slick Rocks management purchased the Sandstone stock for the trading securities portfolio in
vitfil [10]

The journal entry for the purchase of the stock for the trading securities portfolio is that Securities account debited and bank account credited.

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We are required to form the journal entry that are required by the facts presented in the case.

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The journal entry will be as under:

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6 0
1 year ago
What is the difference between a savings account and a certificate of deposit?
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6 0
3 years ago
A profit-maximizing firm operates in purely competitive product and resource markets, with the following resource and production
andrew11 [14]

Answer:

b) 5

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7 0
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stepladder [879]

Answer:

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