For Supply Item ABC, Andrews Company Has Been Ordering 125

question 80

Essay

For supply item ABC, Andrews Company has been ordering 125 units based on the recommendation of the salesperson who calls on the company monthly.A new purchasing agent has been hired by the company who wants to start using the economic order quantity method and its supporting decision elements.She has gathered the following information:
Required:
Determine the EOQ, average inventory, orders per year, average daily demand, reorder point, annual ordering costs, and annual carrying costs.

---

Definitions:

Punitive Damages

Financial compensation awarded to a plaintiff in a lawsuit, intended to punish the defendant for particularly harmful behavior.

Novation

Novation is the legal process by which an existing contract is replaced with a new contract, involving the same or different parties, where the obligations of the original contract are extinguished and replaced by new obligations.

Exemption Clause

A contractual provision that seeks to limit or exclude one's liability in certain situations, often subject to legal scrutiny for fairness.

Fundamental Breach

A serious violation of a contract that allows the aggrieved party to terminate the agreement and sue for damages.