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Chapter 3: 13BP_b (page 222)

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 \(8 per order, and carrying costs of \)1.60 per unit.

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

Short Answer

Expert verified

The number of orders placed is 70 orders.

Step by step solution

01

Information available

Projected sales = 49,000 units

Economic order quantity= 700 units

02

Calculation of orders placed in a year

The number of orders placed in a year is 70 orders.

Numberoforders=ProjectedsalesEOQ=49,000units700units=70orders

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Most popular questions from this chapter

Nowlin Pipe & Steel has projected sales of 72,000 pipes this year, an ordering cost of \(6 per order, and carrying costs of \)2.40 per pipe.

c. What will the average inventory be?

Guardian Inc. is trying to develop an asset financing plan. The firm has \(400,000 in temporary current assets and \)300,000 in permanent current assets. Guardian also has \(500,000 in fixed assets. Assume a tax rate of 40 percent.

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Bombs Away Video Games Corporation has forecasted the following monthly sales:

January

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March

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December

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Bombs Away Video Games sells the popular Strafe and Capture video game. It sells for \)5 per unit and costs \(2 per unit to produce. A level production policy is followed. Each month鈥檚 production is equal to annual sales (in units) divided by 12.

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