Solution-Calculate total annual carrying costs and

Calculate total annual carrying costs and restocking costs

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Reference no: EM133184776

Question - Your cousin's business is up and running. She is meeting inventory management issues and wants to solve the repeated problem once and for all. Each period, her company starts with 350 metal bars in stock. This stock is depleted every two weeks and reordered. The calendar year is comprised of 52 weeks. It costs $1.50 to hold every metal bar over the year. Every order comes at a fixed cost (unloading, storage and record of receipt) of $300.00.

(a) Calculate the total annual carrying costs and the restocking costs.

(b) Explain in few sentences why this business does not follow an economically advisable strategy.

Your cousin places an order for 540 units of metal bar at a unit price of $62.00. The supplier offers terms of 1/10, net 30.

(c) Indicate how much time can you wait to pay before the account is overdue. If you take the full period, determine how much you will have to remit.

(d) Identify the discount being offered and the period left for payment to get the discount. If you do take the discount, determine how much you will have to remit.

Reference no: EM133184776

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Calculate total annual carrying costs and restocking costs

Reference no: EM133184776

Reference no: EM133184776

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