Q1. XYZ is a retailer and sells 117,000 units per year. It purchases from a single supplier. Fixed costs per order are $935 and carrying cost is $13 per unit. How many units should XYZ purchase per order? That is, what is the Economic Order Quantity?
Q2. XYZ is a retailer and sells 173,000 units per year. It purchases from a single supplier. Fixed costs per order are $924 and carrying cost is $11 per unit per year. In economic order quantity model, what would be the lowest total inventory cost? That is, the lowest sum of total carrying cost and total shortage cost.
Q3. XYZ used an investment bank to do IPO. In IPO, XYZ sold 1 million shares at $63 each. The investment bank charged 7% spread. At the end of the 1st day of trading, XYZ stock price closed at $77. Calculate the total cost of IPO. That is, what is the sum of direct and indirect cost?
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