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A Firm Annually Sells 7,890 Units

question 21

Essay

A firm annually sells 7,890 units. The cost of placing an order is $100 and the carrying costs are $2 a unit. What are the EOQ, the duration of the EOQ, and how many orders are placed annually? If the safety stock is 100 units, what are the maximum and average levels of inventory?


Definitions:

Compounded Annually

Interest that is computed once per year and added to the account's total.

Consistent Annual Contributions

Regular annual payments or deposits made into a financial account or investment to grow savings over time.

Compounded Annually

Interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan.

Compounded Annually

Describes the process where interest is calculated and added to the principal sum of an investment or loan once a year.

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