Question

Wimbledon sports is a british sports goods company that sells 180,000 tennis racquets in a year. The carrying cost of inventory per racquet is $1 per year, and it costs $4 to place, process and receive an order. (a) what ordering quantity minimizes inventory costs? [2] (b) how many orders will be placed each year if that order quantity is used? [2] (c) what inventory costs are incurred for the part with this ordering quantity?

Answer 1

INVENTORY TYPES. Inventory is defined as a stock or store of goods. ... If the firm is a manufacturer, it must maintain some inventory of raw materials and work-in-process in order to keep the factory running. In addition, it must maintain some supply of finished goods in order to meet demand.