What is the annual cost of ordering and carrying tea

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Reference no: EM13962618

The Always Fresh Grocery Store carries a particular brand of coffee with following characteristics:

Sales = 3000 cases per year

Ordering cost = $300 per order

Carrying charge = 10% per year

Item cost = $50

Number of working days per year = 250 days

a(4). How many cases should be ordered at a time?

b(4). How often coffee will be ordered, i.e., what is the time between orders?

c(5). What is the annual cost of ordering and carrying tea?

d(7). What is the effect on EOQ and total cost if there is a 44% increase in carrying charges? (Note that carrying charge change from 10% per year to 20% per year would mean an increase of 100% in carrying charges.)

Reference no: EM13962618

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