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What are the eoq and total inventory costs

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Reference no: EM132497097

Start with the partial model in the file Ch28 P03 Build a Model.xls on the textbook's Web site. The following inventory data have been established for the Adler Corporation.

(1) Orders must be placed in multiples of 100 units.

(2) Annual sales are 338,000 units.

(3) The purchase price per unit is $3.

(4) Carrying cost is 20% of the purchase price of goods.

(5) Cost per order placed is $24.

(6) Desired safety stock is 14,000 units; this amount is on hand initially.

(7) Two weeks are required for delivery.

Question 1: What are the EOQ and total inventory costs if the following were to occur?

(1) Sales increase to 500,000 units.

(2) Fixed order costs increase to $30; sales remain at 338,000 units.

(3) Purchase price increases to $4; sales and fixed costs remain at original values.

Reference no: EM132497097

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