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In the second year Fisk Corporation finds that it can reduce ordering costs to $2 per order but that carrying costs stay the same at $120 Also volume remains at 75000 units

In the second year, Fisk Corporation finds that it can reduce ordering costs to $2 per order but that carrying costs stay the same at $1.20. Also, volume remains at 75,000 units.

a.  a, b, c, and d in Problem 13 for the second year.

b. Now compare years one and two and explain what happened.

Problem 13

Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 75,000 units per year, an ordering cost of $8 per order, and carrying costs of $1.20 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?

Apr 23 2020 View more View Less

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