What is the eoq for the mowers

Reference no: EM131393790

Refer to the information provided for Roybow Corporation in Problem 15-19. Suppose that Roybow's supplier decides to offer a 2 percent cash discount if products are ordered in increments of 1.000. How many mowers should Roybow order each time an order is placed to minimize total inventory costs?

Problem 15-19

Roybow Corporation sells lawn mowers that cost $160 each to purchase and prepare for sale. Annual sales are 5,000 mowers, carrying costs are 20 percent of inventory costs, and Roybow incurs a cost of $32 each time an order is placed.

(a) What is the EOQ for the mowers?

(b) What will be the total inventory costs if the EOQ amount is ordered?

Reference no: EM131393790

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