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tunisia81 tunisia81
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8 months ago
Fullerton Wine Company is a retailer that sells vintage wines. The company has established a policy of reordering inventory every 30 days. A recently employed MBA has considered Fullerton’s inventory problem from the EOQ model viewpoint. If the following constitute the relevant data, how does the current policy compare with the optimal policy? Assume 360 days in a year.

​

Ordering cost = $10 per order

Carrying cost = 20% of purchase price

Purchase price = $10 per unit

Total sales for year = 1,000 units

Safety stock = 0



▸

Total costs will be the same, since the current policy is optimal.



▸

Total costs under the current policy will be less than total costs under the EOQ by $10.



▸

Total costs under the current policy exceed those under the EOQ by $3.



▸

Total costs under the current policy exceed those under the EOQ by $10.

Textbook 
Financial Management: Theory and Practice

Financial Management: Theory and Practice


Edition: 4th
Authors:
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onidonid
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8 months ago
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tunisia81 Author
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8 months ago
Thanks for your help!!
jcarter
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Yesterday
Helped a lot
Holly72492
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2 hours ago
Just got PERFECT on my quiz
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