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andreev551 [17]
2 years ago
7

The Home and Garden (HG) chain of superstores imports decorative planters from Italy. Demand for the planters is stable and aver

ages at 150/week. Each planter costs $10. HG incurs a holding cost of 30% per year to carry inventory. HG has an opportunity to set up a superstore in the Phoenix region. Each order shipped from Italy incurs a fixed transportation and delivery cost of $5000. Consider 50 weeks in the year. Suppose HG uses the economic order quantity (EOQ) model to make ordering decisions. Then the average inventory that HG carries for the year would be
Business
1 answer:
Korolek [52]2 years ago
6 0

Answer:

The average inventory which HG should carry during the year is 5,000 units.

Explanation:

Economic Order Quantity is the ideal inventory procurement which minimizes holding and ordering cost. The EOQ is used by businesses in order to determine the best possible inventory holding.

EOQ = \sqrt{\frac{2*Annual Demand * Ordering Cost}{Annual Holding Cost} }

EOQ = \sqrt\frac{2*7,500*5,000}{10*0.3}

EOQ = 5,000 units

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In this market research step, the data are compiled, studied, and interpreted:
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3 years ago
Adam has a monthly income of $20 that can be spent on books (B) and pencils (P). The price of a book is $5 and the price of a pe
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3 years ago
All sales are made on account. Collections from customers are normally 70 percent in the month of​ sale, 20 percent in the month
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The expected ending balance on November 30 will be $134,500

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Sales Collected (165,000*70%)                  $115,500

Expenses paid                                            ($36,000)

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Cash ending Nov 30                                    $134,500

5 0
3 years ago
Read 2 more answers
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