Appliance for Less is a local appliance store. It costs this store $23.44 per unit annually...
Free
60.1K
Verified Solution
Link Copied!
Question
Finance
Appliance for Less is a local appliance store. It costs thisstore $23.44 per unit annually for storage, insurance, etc., tohold microwave in their inventory. Sales this year are anticipatedto be 266 units. Each order costs $68. The company is usingEconomic Order Quantity model in placing the orders.
It takes approximately 2 day(s) to receive an order after it hasbeen placed. If the store insists on a 6 day(s) safety stock(assume 365-days a year), what should the inventory level be when anew order is placed?
(Round the answer to the whole number)
Appliance for Less is a local appliance store. It costs thisstore $23.44 per unit annually for storage, insurance, etc., tohold microwave in their inventory. Sales this year are anticipatedto be 266 units. Each order costs $68. The company is usingEconomic Order Quantity model in placing the orders.
It takes approximately 2 day(s) to receive an order after it hasbeen placed. If the store insists on a 6 day(s) safety stock(assume 365-days a year), what should the inventory level be when anew order is placed?
(Round the answer to the whole number)
Answer & Explanation Solved by verified expert
Annual demand = 266
Ordering cost per order = 68
Carrying cost per unit = 23.44
EOQ = (2×266×68/23.44)^1/2
= 39 units
Safety stock = (Annual demand / 365 days) × Safety days = (266/365) × 6 = 4
Inventory level at the time of a new order is placed = Average units × Lead time + Safety stock
= (266/365) × 2 + 4
= 6 units
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Transcribed Image Text
Appliance for Less is a local appliance store. It costs thisstore $23.44 per unit annually for storage, insurance, etc., tohold microwave in their inventory. Sales this year are anticipatedto be 266 units. Each order costs $68. The company is usingEconomic Order Quantity model in placing the orders.It takes approximately 2 day(s) to receive an order after it hasbeen placed. If the store insists on a 6 day(s) safety stock(assume 365-days a year), what should the inventory level be when anew order is placed?(Round the answer to the whole number)
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.