Given the Following Data

question 104

Essay

Given the following data:

The beginning inventory is 0 and there are no scheduled receipts. The order cost is $50 and the holding cost is $1 per part per period.
(a) What are the order costs, carrying costs, and totals cost over the 8 periods using the lot-for-lot size rule?
(b) What are the order costs, carrying costs, and totals cost over the 8 periods using the fixed order quantity rule with FOQ = 100?
(c) What are the order costs, carrying costs, and totals cost over the 8 periods using the period order quantity rule with POQ = 2?

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Definitions:

Maturity

The fixed date in the future at which the principal amount of a bond or other financial instrument is scheduled to be repaid.

STRIPPED Cash Flows

Cash flows from an investment that have had certain elements removed, often related to interest or taxes, to reflect the underlying performance more accurately.

Arbitrage

The practice of profiting from price differences of the same asset in different markets by simultaneously buying and selling it.

Treasury Bond

A long-term government debt security with a fixed interest rate, considered low-risk.