Use the following information to answer the question below An auto parts supplier...
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Accounting
Use the following information to answer the question below
An auto parts supplier sells power sport batteries to Yamaha ATVs dealers and auto mechanics. The annual demand is approximately 1,200 batteries. The supplier pays RM28 for each battery and estimates that the annual carrying cost is 30% of the batterys value. It costs approximately RM20 to place an order (managerial and clerical costs). The supplier currently purchases 100 batteries per-order.
Determine the yearly savings using the EOQ system in comparison to the firms current inventory system.
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