Oster Company Ltd. manufactures dusk to dawn lamps. The following are the details of their operation during 2021: Average monthly market demand 2,000 lamps Ordering costs $ 200 per order Inventory carrying costs 20% per annum Cost of lamps $ 1000 per lamp Normal usage 100 lamps per week Minimum usage 50 lamps per week Maximum usage 200 lamps per week Lead time to supply 4 - 6 weeks Compute: Economic order quantity
Oster Company Ltd. manufactures dusk to dawn lamps. The following are the details of their operation during 2021: Average monthly market demand 2,000 lamps Ordering costs $ 200 per order Inventory carrying costs 20% per annum Cost of lamps $ 1000 per lamp Normal usage 100 lamps per week Minimum usage 50 lamps per week Maximum usage 200 lamps per week Lead time to supply 4 - 6 weeks Compute: Economic order quantity
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Oster Company Ltd. manufactures dusk to dawn lamps. The following are the details of their operation during 2021:
Average monthly market demand 2,000 lamps
Ordering costs $ 200 per order
Inventory carrying costs 20% per annum
Cost of lamps $ 1000 per lamp
Normal usage 100 lamps per week
Minimum usage 50 lamps per week
Maximum usage 200 lamps per week
Lead time to supply 4 - 6 weeks
Compute:
Economic order quantity
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