carrying cost and restocking cost
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Auto Parts sells 1,200 electric parts per week and then reorders another 1,200 parts. If the relevant carrying cost per electric part is $4 and the fixed order cost is $750, what is the total carrying cost and the restocking cost, respectively?
a) $2,400 and $39,900
b) $3,200 and $33,800
c) $2,400 and $39,000
d) $3,400 and $30,000
e) None of the above
Company ABC has expected sales of 75,000 units this year, an ordering cost of $8 per order and carrying costs of $1.20 per unit. What is the EOQ?
a) 900 units
b) 1000 units
c) 100 units
d) 500 units
e) None of the above
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This solution shows how to solve for two multiple choice questions that involve finding the total carrying cost, the restocking cost, and the EQQ.
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a) The carrying costs are the average inventory ...
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