help in homework

New User?

Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / Blueline Manufacturing starts each period with 780 tennis rackets in stock and total yearly sales is 45 000 units

Blueline Manufacturing starts each period with 780 tennis rackets in stock and total yearly sales is 45 000 units

Finance

Blueline Manufacturing starts each period with 780 tennis rackets in stock and total yearly sales is 45 000 units. This stock is depleted each month and reordered. If the carrying cost per racket is $4, and the fixed order cost is $6. Is Blueline following an economically order size strategy?

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

Answer lead:
 
Economically order size is computed using demand, order cost and holding cost.
Inputs:  
   
Opening stock 780
Annual demand 45000
carrying cost per racket in $ 4
order cost in $ 6
Working:    
     
EOQ= √2AB/C  
A- annual demand 45000  
B-order cost 4  
C- carrying cost 6  
     
EOQ= √2*45000*4/6
  244.95  
EOQ 245 rounded off
Solution:
EOQ for blue line manufacturing is 245 but the entity stocks 780 tennis rackets.
Blue line manufacturing has higher stock (780) than EOQ (245).

Sitejabber (5.0)

BBC (5.0)

Trustpilot (4.9)

Google (5.0)