As a recent graduate of Gies, you have been hired as an Inventory Analyst by Olivia Rodrigo Sportswear. Your first assignment is to evaluate the cost of the current inventory policy for one of their...

M6

Extracted text: As a recent graduate of Gies, you have been hired as an Inventory Analyst by Olivia Rodrigo Sportswear. Your first assignment is to evaluate the cost of the current inventory policy for one of their most popular shirts based on the following information. Demand = 250,000 units/year, Ordering Costs = $450/order, Purchase Cost = $17.50/ unit, Annual Holding Cost = 20% of cost, EOQ = 8,018 shirts. Supplier Silk Sonic is pushing Olivia Rodrigo Sportswear to use an order quantity of 20,000 units based on their own convenience and cost structure. Compared to the total cost of inventory management based on EOQ (calculated in the previous question), accepting this order quantity will result in the total cost of inventory management (keeping all other demand and inventory cost information unchanged. being.