Question

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 = |
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Total inventory cost = |

Answer #1

Answer with working notes is given below

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