Asked by
Megan Elsarji
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 restocking costs using the EOQ?
A) $3,184
B) $4,102
C) $4,744
D) $4,981
E) $5,169
Restocking Costs
The expenses associated with replenishing inventory once it has been sold to customers.
EOQ
Economic Order Quantity is a formula used in inventory management to determine the optimal order quantity that minimizes total inventory costs.
Carrying Cost
The total cost of holding inventory, including storage, insurance, and opportunity costs.
- Learn to identify and quantify the expenses of carrying and restocking within inventory management frameworks.
- Gain expertise in handling inventory amounts and scheduling purchases to decrease expenditures.
Verified Answer
1M
Learning Objectives
- Learn to identify and quantify the expenses of carrying and restocking within inventory management frameworks.
- Gain expertise in handling inventory amounts and scheduling purchases to decrease expenditures.