1. Each year, Y Company purchases 20,000 units of an item that costs P 640 per unit. The cost of placing an order is 480, and the cost to hold the item in inventory for one year is P150. b. What is the average inventory level, assuming that the minimum inventory level is zero? c. Determine the total annual ordering cost and the total annual holding cost for the item if the EOQ is used.
1. Each year, Y Company purchases 20,000 units of an item that costs P 640 per unit. The cost of placing an order is 480, and the cost to hold the item in inventory for one year is P150. b. What is the average inventory level, assuming that the minimum inventory level is zero? c. Determine the total annual ordering cost and the total annual holding cost for the item if the EOQ is used.
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
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Please answer what is asked in letter B and C. Thank you!
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