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Joiner & Sons Hardware: Case Study Exploring Multichannel Opportunities : Stephanie claims increasing sales will reduce the COGS on a PER UNIT basis. Wilson’s EOQ includes some of the logistics costs...

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Joiner & Sons Hardware: Case Study 
Exploring Multichannel Opportunities

: Stephanie claims increasing sales will reduce the COGS on a PER UNIT basis. Wilson’s
EOQ includes some of the logistics costs in COGS [assume annual demand is 1,000
units per year, ordering cost is $55 per order, annual inventory carrying cost is 34.8%,
unit purchase price is $48, and sales increases by 24% annually]. Show how increasing
sales for an item will lower the COGS on a PER UNIT basi

Answered 111 days After Jun 06, 2022

Solution

Baljit answered on Sep 25 2022
67 Votes
JOINERS AND SONS: CASE STUDY
Annual demand D= 1000 units
Ordering cost TC=$55
Purchase price per unit P=$48
Annual inventory ca
ying cost=Holding cost(%)=34.8%
Holding cost HC ($)=34.8% of purchasing cost=0.348*48=$16.704
EOQ=((2*D*TC)/HC)1/2=((2*1000*55)/16.704)1/2=81Quantity
No. of order...
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