Problemthe gentry garden center sells 90000 bags of lawn, Ask an Expert

Accounting

Problem:

The Gentry Garden Center sells 90,000 bags of lawn fertilizer annually. The optimal safety stock (which is on hand initially) is 1,000 bags. Each bag costs the firm $1.50, inventory carrying costs are 20%, and the cost of placing an order with its supplier is $15.

Required:

Question 1: What is the Economic Ordering Quantity?

Question 2: What is the maximum inventory of fertilizer?

Question 3: What will be the firm's average inventory?

Question 4: How often must the company order?

Note: Show supporting computations in good form.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91171067

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