The Trektronics store begins each month with 1,200 phasers in stock. This stock
ID: 2635989 • Letter: T
Question
The Trektronics store begins each month with 1,200 phasers in stock. This stock is depleted each month and reordered. The carrying cost per phaser is $37 per year and the fixed order cost is $565. (Enter your answer as directed, but do not round intermediate calculations.)
The Trektronics store begins each month with 1,200 phasers in stock. This stock is depleted each month and reordered. The carrying cost per phaser is $37 per year and the fixed order cost is $565. (Enter your answer as directed, but do not round intermediate calculations.)
Explanation / Answer
he Trektronics store begins each month with 1,200 phasers in stock. This stock is depleted each month and reordered. The carrying cost per phaser is $37 per year and the fixed order cost is $565
The carrying costs are the average inventory times the cost of carrying an individual unit, so:
Carrying costs = (1200/2)($37) = 22200
The economic order quantity is:
EOQ = [(2T
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