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sunjx sunjx
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4 years ago
Miniature Company sells stuffed tigers. Birtal Inc. manufactures many different stuffed animals. Miniature orders 20,800 tigers per year, 400 per week, at $15 per tiger. The manufacturer covers all shipping costs. Miniature earns 15% on its cash investments. The purchase-order lead time is 3 weeks. Miniature sells 310 tigers per week. The following data are available (based on management's estimates):

Estimated ordering costs per purchase order$22
Estimated insurance, materials handling, breakage,
and so on, per year$7
Actual ordering costs per order$25

What is the economic order quantity using the estimated amounts?
A) 637.7 stuffed tigers
B) 314.5 stuffed tigers
C) 191 stuffed tigers
D) 325 stuffed tigers
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NisaNisa
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Posts: 185
4 years ago
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 B
Explanation:  B) EOQ =  
EOQ = 314.5 units

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