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A Shoe Store Sells 90 Pairs of Shoes Each Month

question 9

Essay

A shoe store sells 90 pairs of shoes each month.Each pair carried in stock incurs a holding cost of $10 per month.Each order costs approximately $25 in shipping and receiving.
a.What is the optimal EOQ?
b.What is the optimal number of orders per month?
c.What are the total ordering and carrying costs?


Definitions:

Patent

A legal right granted to an inventor for an exclusive period, typically 20 years, to exploit a new, useful, and non-obvious invention.

Consolidated Cash Flows

A statement merging the cash flows of a parent company and its subsidiaries to present the overall cash generated or used by the entire group.

Equity Method

An accounting technique used to record investments in other companies by recognizing income and changes in investment value.

Voting Shares

Stocks that allow the holder to participate in voting on corporate issues, including the election of board members.

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