A ﬁrm sells 45,000 units a year. It has an EOQ of 1,800 units. The ﬁrm offers its customers credit terms of 2/10, net 30. The ﬁrm uses a 360-day year. If both the ﬁrm and the customers operate in a
Manner that maximizes the beneﬁts to them, the ﬁrm will have an operating cycle equal to ___
Days.

Question

Quizplus · Accepted Answer

The firm will have an operating cycle equal to 24.4 days if both the firm and the customers operate in a manner that maximizes the benefits to them. This is because the firm will receive payment for its products within 24.4 days of the sale.

A ﬁRm Sells 45,000 Units a Year