In the Basic EOQ Model, If D=40 Per Month, C_o=$9

question 105

Short Answer

In the basic EOQ model, if D=40 per month, C_o=$9, and C_c=$8 per unit per month, what is the EOQ?

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Definitions:

Payables Period

The average amount of time it takes for a business to pay off its owed liabilities to suppliers or creditors.

Cash Cycle

It describes the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Inventory Period

The amount of time it takes for a company to sell through its current stock of inventory.

Accounts Receivable Period

The average number of days that it takes a company to collect payments after a sale has been made, a critical component of managing cash flow.