Answer the following question(s) using the information below:
Owen-King Company sells optical equipment.Lens Company manufactures special glass lens.Owen-King Company orders 5,200 lens per year, 100 per week at $20 per lens.Lens Company covers all shipping costs.Owen-King Company earns 30% on its cash investments.The purchase order lead time is 2.5 weeks.Owen-King Company sells 125 lens per week.The following data is available:
-What is the economic order quantity for Owen-King Company?
Definitions:
Homogeneous Products
Goods that are perfect substitutes for each other; they are identical in quality, function, and appearance.
Mutual Interdependence
A situation in a market where the actions of one firm significantly impact the profitability of other firms within the same market.
Barriers to Entry
Obstacles that make it difficult for new competitors to enter a market, including high startup costs, strict regulations, or strong incumbents.
Excess Capacity
The situation where a firm or economy can produce more goods or services than currently produced, indicating under-utilization of resources.
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