Midwest Charm, Inc. specializes in selling scented farm equipment. The company has established a policy of reordering inventory once a month. A recently employed MBA has considered Midwest's inventory problem from the EOQ model viewpoint. If the following constitute the relevant data, how does the following current policy compare with the optimal policy? Ordering cost Carrying cost Purchase price Total sales for year Safety stock = $2,525 per order = 35% of purchase price = $15,000 per unit = 660 units %3! = 15

Midwest Charm, Inc. specializes in selling scented farm equipment. The company has established a policy of reordering inventory once a month. A recently employed MBA has considered Midwest's inventory problem from the EOQ model viewpoint. If the following constitute the relevant data, how does the following current policy compare with the optimal policy? Ordering cost Carrying cost Purchase price Total sales for year Safety stock = $2,525 per order = 35% of purchase price = $15,000 per unit = 660 units %3! = 15

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Description: At theEOQ, what is the firm’s total inventory costper year, assuming safety stock = 15 units? Midwest Charm, Inc. specializes in selling scented farm equipment. The company has established apolicy of reordering inventory once a month. A recently empl

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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