Asked by
Jordan Marotto
on Dec 09, 2024
Verified
Karloff Medical Supply maintains an average inventory of 2,000 human skulls for sale to medical schools and filmmakers. The carrying cost per skull per year is estimated to be $5. Boris places an order for 10,000 skulls on the first of each month and the order cost is $75. What are the total carrying costs using the EOQ?
A) $3,184
B) $4,102
C) $4,743
D) $4,981
E) $5,169
EOQ
Economic Order Quantity, a formula used to determine the ideal quantity of inventory to minimize total costs related to ordering, receiving, and holding inventory.
Carrying Cost
The total cost of holding inventory, including storage, insurance, taxes, depreciation, and obsolescence, which affects a company's overall profitability.
- Comprehend and compute carrying as well as restocking expenses related to inventory control.
- Acquire knowledge on managing stock quantities and planning orders to reduce expenses.
Verified Answer
SS
Learning Objectives
- Comprehend and compute carrying as well as restocking expenses related to inventory control.
- Acquire knowledge on managing stock quantities and planning orders to reduce expenses.