Question

The I-75 Carpet Discount Store has an annual demand of 10,000 yards of Super Shag carpet....

The I-75 Carpet Discount Store has an annual demand of 10,000 yards of Super Shag carpet. The annual carrying cost for a yard of this carpet is $0.75, and the ordering cost is $150. The carpet manufacturer normally charges the store $8 per yard for the carpet; however, the manufacturer has offered a discount price of $6.50 per yard if the store will order 5,000 yards. How much should the store order, and what will be the total annual inventory cost for that order quantity.

please put in excel format

ORDERING ORDERING
EOQ         5,000
         =
Average inventory = Q/2   =
Annual carrying cost   =
Number of orders =  
Annual order cost =  
Total inventory purchase cost =
Total inventory cost =

Homework Answers

Answer #1

Answer with working notes is given below

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The I-75 Carpet Discount Store has an annual demand of 10,000 yards of Super Shag carpet....
The I-75 Carpet Discount Store has an annual demand of 10,000 yards of Super Shag carpet. The annual carrying cost for a yard of this carpet is $0.75, and the ordering cost is $150. The carpet manufacturer normally charges the store $8 per yard for the carpet; however, the manufacturer has offered a discount price of $6.50 per yard if the store will order 5,000 yards. How much should the store order, and what will be the total annual inventory...
a company decides to establish an EOQ for an item. The annual demand is 200,000 units....
a company decides to establish an EOQ for an item. The annual demand is 200,000 units. The ordering costs are $40 per order, and inventory-carrying costs are $2 per unit per year. Calculate the following: A. The EOQ in units. B. Number of orders per year. C. Annual ordering cost, annual holding cost, and annual total cost.
The Western Jeans Company purchases denim from Cumberland Textile Mills. The Western Jeans Company uses 35,000...
The Western Jeans Company purchases denim from Cumberland Textile Mills. The Western Jeans Company uses 35,000 yards of denim per year to make jeans. The cost of ordering denim from the textile company is $500 per order. It costs Western $0.35 per yard annually to hold a yard of denim in inventory. Determine the optimal number of yards of denim the Western Jeans Company should order, the minimum total annual inventory cost, the optimal number of orders per year, and...
A textile manufacturer has cloth that has a $14 per yard carrying cost per year. This...
A textile manufacturer has cloth that has a $14 per yard carrying cost per year. This cloth is used at a rate of 25,000 yards per year, and ordering costs are $10 per order. 1. What is the economic order quantity for this cloth? 2. What are the annual inventory costs for this firm if it orders in this quantity? 3. What essential features of inventory management are successfully captured by the “economic order quantity” model?
Demand for carpet at a carpet wholesaler stays constant at 10,000 sq. ft. per month. The...
Demand for carpet at a carpet wholesaler stays constant at 10,000 sq. ft. per month. The wholesaler incurs a fixed transportation cost of $100 each time an order is placed and delivered. The carpet costs $3 per sq. ft. and the wholesaler has an annual holding cost rate (per sq. ft.) that is 20% of the unit purchase cost. What should the optimal order size (or EOQ) be? Note that the carpet can be ordered in any size, so there...
A local discount store stocks toy race cars. Recently, the store has received the following discount...
A local discount store stocks toy race cars. Recently, the store has received the following discount schedule for these cars.  The annual demand for race case is 5000 cars, the ordering costs are $49 per order and the annual carrying costs are 20% percent of the unit price. a.) Indicate the order quantity, price and total cost that will minimize total inventory costs. Quantity                Price 1-699                       $5.00 700-1999 $4.80 2000 +                     $4.75 b.) Assume that the discount store would like to have a...
Need It ASAP!!!!! Wang Distributors has an annual demand for an airport metal detector of 1...
Need It ASAP!!!!! Wang Distributors has an annual demand for an airport metal detector of 1 comma 400 units. The cost of a typical detector to Wang is ​$400. Carrying cost is estimated to be 18​% of the unit​ cost, and the ordering cost is ​$27 per order. If Ping​ Wang, the​ owner, orders in quantities of 300 or​ more, he can get a 7​% discount on the cost of the detectors. Should Wang take the quantity​ discount? What is...
. A store that sells healthy food has an annual demand for a specific item 810...
. A store that sells healthy food has an annual demand for a specific item 810 units. The cost of placing an order is $20, while holding cost per unit per year is $4. How many orders per year should they have What is the minimum total cost of inventory (ordering and holding)
Lilibeth works as a purchasing officer in a hardware store. She has determined that the annual...
Lilibeth works as a purchasing officer in a hardware store. She has determined that the annual demand for number 8 tek screws is 150,000 screws. She estimates that it costs P500 every time an order is placed. This cost includes her salary, the cost of the forms used in placing the order, and so on. Furthermore, she estimates that the cost of carrying one screw in inventory for a year is P2.50. Assume that the demand is constant throughout the...
A quantity discount of 10% in existing unit price is offered, provided order and supply quantity...
A quantity discount of 10% in existing unit price is offered, provided order and supply quantity is at least 500 units. The following information is given: Annual demand - 1000 numbers Procurement cost per order - Rs 100 Inventory carrying cost per annum- 22% of the acquisition cost Existing unit price ( acquisition cost ) Rs 10 What will be the annual saving ( if any) if discount is availed of, instead of ordering out as per EOQ based on...