This Is skill-building exercise. You should provide formulas, steps, or reasons

Question

This Is skill-building exercise. You should provide formulas, steps, or reasons to support your solutions. You Must show how did you reach every number Submissions with only the final solutions will not be qiven any credit Currently, the total cost of ordering and holding inventory at Toys for Kids is $1736. The purchase price per unit is $10. The total holding cost if the company is using EOO is $685.86. A. What is total cost of inventory (holding and ordering costs) if the company is using EOQ? B. If the holding cost per unit is $3.5, how much could the firm save annually in ordering and holding costs by using the EOQ instead of the current policy, which results in total cost of $1736?

Explanation / Answer

A. If the company is using EOQ, then total holding cost is equal to total ordering cost.

Therefore, total cost of inventory (holding and ordering costs) = 685.86+685.86

= $ 1372

B. Annual saving by using EOQ policy in stead of current policy = 1736 - 1372

= $ 364

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.