Part a The Deli University Gift Shop purchases sweatshirtsemblazoned with the school name and...

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Accounting

Part a The Deli University Gift Shop purchases sweatshirtsemblazoned with the school name and logo from a vendor in SpainTown at a cost of $2,000 each. The annual holding cost for asweatshirt is calculated as 1.5% of the purchase cost. It costs theGift Shop $500 to place a single order. The Gift Shop managerestimates that 900 sweatshirts will be sold during each month ofthe upcoming academic year
i) Determine the highest number of shirts that should bepurchased by the Gift Shop in order to minimize stockadministration costs.
ii) What is the number of orders to be placed each year?
iii)Compute the average annual ordering cost
iv) Compute the average annual carrying cost
v) Compute the total stock administration cost
Part b The maximum sale for the Gift Shop for any one week is300 sweatshirts and minimum sales 150 sweatshirts. The vendor takesanywhere from 2 to 4 weeks to deliver the merchandise after theorder is placed. Using the EOQ policy, determine the re-orderlevel, minimum inventory level and maximum inventory level for thebusiness.

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In: AccountingPart a The Deli University Gift Shop purchases sweatshirtsemblazoned with the school name and logo...Part a The Deli University Gift Shop purchases sweatshirtsemblazoned with the school name and logo from a vendor in SpainTown at a cost of $2,000 each. The annual holding cost for asweatshirt is calculated as 1.5% of the purchase cost. It costs theGift Shop $500 to place a single order. The Gift Shop managerestimates that 900 sweatshirts will be sold during each month ofthe upcoming academic yeari) Determine the highest number of shirts that should bepurchased by the Gift Shop in order to minimize stockadministration costs.ii) What is the number of orders to be placed each year?iii)Compute the average annual ordering costiv) Compute the average annual carrying costv) Compute the total stock administration costPart b The maximum sale for the Gift Shop for any one week is300 sweatshirts and minimum sales 150 sweatshirts. The vendor takesanywhere from 2 to 4 weeks to deliver the merchandise after theorder is placed. Using the EOQ policy, determine the re-orderlevel, minimum inventory level and maximum inventory level for thebusiness.