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Evaluation of EOQ Decisions of college on vendor's order
The bookstore at Smith College purchases sport shirts with the college logo to sell from a local vendor. The vendor sells the sport shirts to the college for $38 each. The cost to the bookstore for placing each order is $120. The carrying cost is $5.20 per shirt per year. The bookstore estimates that 1700 sport shirts will be sold over the next year and does not want any shortages. The bookstore sells the shirt for $50 each. There are 260 business days a year for the bookstore. Lead time for filling an order once placed is 2 weeks. The vendor has offered the College Bookstore the following discounts:
% of Order
Cost of Shirts from Vendor
What order size should Smith College acquire from the vendor? Explain Why?
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Computation of Economic Order quantity of Books for college and What is their expected total inventory cost (excluding the unit cost of the shirts)?
Evaluation of Re-order level of books Inventory of college - If the time to fill an order is 10 business days, what is the Reorder Point for ordering shirts?
Evaluation of EOQ - Inventory with shortage of stock allowance Should the bookstore allow shortages? Explain the basis for your answer.
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