What is the economic ordering quantity

Assignment Help Financial Management
Reference no: EM13878565

Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 49,000 units per year, an ordering cost of $2 per order, and carrying costs of $1.60 per unit.

a) What is the economic ordering quantity? 

b) How many orders will be placed during the year?

c) What will the average inventory be?

 

d) What is the total cost of ordering and carrying inventory?

Reference no: EM13878565

Questions Cloud

How do internal reports differ from external reports? : How do internal reports differ from external reports?
Make a recommendation : You are a systems architect and are asked by your manager to write a 4-page essay explaining to the company CTO (Chief Technology officer) the different types of computer system architectures available to choose from and to make a recommendation what..
Calculate stocks expected return-coefficient of variation : A stock's returns have the following distribution: Demand for the Company's Products Probability of This Demand Occurring Rate of Return If This Demand Occurs Weak 0.1 -20% Below average 0.1 -15 Average 0.4 12 Above average 0.3 32 Strong 0.1 50 1.0. ..
How would real time processing provide a benefit : How would real time processing provide a benefit to managers overseeing business processes?
What is the economic ordering quantity : Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 49,000 units per year, an ordering cost of $2 per order, and carrying costs of $1.60 per unit. Wha..
Why might the time lag involved in batch processing : Why might the time lag involved in batch processing make it unsuitable for some types of transaction processing?
What is her portfolios beta : An individual has $20,000 invested in a stock with a beta of 0.3 and another $60,000 invested in a stock with a beta of 1.5. If these are the only two investments in her portfolio, what is her portfolio's beta? Round your answer to two decimal places..
What is the required rate of return on stock with beta : Assume that the risk-free rate is 5% and the expected return on the market is 12%. What is the required rate of return on a stock with a beta of 0.5? Round your answer to two decimal places.
Why would errors be reduced if a company switched : Why would errors be reduced if a company switched input methods from manual keying of source documents to a bar code system?

Reviews

Write a Review

Financial Management Questions & Answers

  Exchange rate under the theory of interest parity condition

Explain how an increase in the interest rate in Europe would affect the interest rate in the United States and the dollar-euro exchange rate under the theory of Interest Parity Condition. What factors does this theory leave out?

  What is net income and ROA

Diamond Eyes, Inc., has sales of $21 million, total assets of $18.3 million, and total debt of $9.5 million. Assume the profit margin is 9 percent. What is net income? (Enter your answer in dollars not in millions, i.e. 1,234,567.) Net income $ What ..

  Percentage change in the price of bonds

Bond J has a coupon rate of 4.3 percent. Bond S has a coupon rate of 14.3 percent. Both bonds have eleven years to maturity, make semi annual payments, and have a YTM of 9.6 percent. If interest rates suddenly rise by 3 percent, what is the percentag..

  What is expected rate of return and volatility of portfolio

You have $10,000 to invest. You decide to invest $20,000 in Google and short sell $10,000 worth of Yahoo! Google's expected return is 15% with a volatility of 30% and Yahoo!'s expected return is 12% with a volatility of 25%. The stocks have a correla..

  What is the portfolio weight of stock

You own $46,000 portfolio comprised of four stocks. The values of Stock A, B and C are $6,600, $16,700 and $11.400, respectively. What is the portfolio weight of stock D?

  Illustrate three long term external sources of finance

Illustrate three long term external sources of finance.

  Average arithmetic returns overstate the return on portfolio

If an asset’s returns come from a normal distribution, then the relation between its arithmetic and geometric averages are: E[arithmetic average] = E[geometric average] – 0.5σ2. Relative to a buy and hold strategy, average arithmetic returns overstat..

  Improve the financial performance of the organization

As the CFO, suggest one (1) key strategy that you might use in order to improve the financial performance of the organization. Recommend an approach to implement the suggested strategy. Provide support for your recommendation

  Treasury security for you to consider making an investment

Inflation is expected to be 3 percent over the next year. You desire an annual real rate of return of 2.5 percent on your investments. What nominal rate of interest would have to be offered on a one-year Treasury security for you to consider making a..

  Calculate the total return and not worry about how

Suppose that a security costs $1,500 today. a Calculate the percentage return on the security if the payoff to the security in one year is $1,000, $1,500, $2,000, or $2,500.

  Interest rate or payment of the same type of investment

Find the value of an investment (perpetuity) that pays you $6,000 annually forever but returns no principle. Find the interest rate or payment of the same type of investment.

  Standard deviation of the investors portfolio

Assume the annual average return on the S&P500 is 13.7% with a standard deviation of 17.5%. A risk-free asset has an annual average return of 4.0% with a standard deviation of 0.0% and a correlation with the S&P500 index of +0.00. An investor invests..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd