The XYZ company has traditionally ordered ink refills 80 units at a time. This company estimates that carrying cost is $ 5 /unit/year; and that annual demand is about 400 units per year. Question: for what valuo of the ordering cost (i,o., cost/order) would the curront order quantity be optimal? Show all the details of your calculations to get full marks.
Q: A moped manufacturing company needs 100,000 units of moped tires for its production per year.The…
A: Economic order quantity was an inventory management costing principle used to find out required…
Q: For supply item ABC, Andrews Company has been ordering 400 units per week. A new purchasing agent…
A: Economic order quantity is that quantity of goods at which total inventory costs are minimum. It…
Q: Dream Enterprise wants to know how much it costs to make (1) unit of their product and how much it…
A: Break Even Point: It is the situation where there is no profit and loss for the company; Total…
Q: Wesley Utility Company uses 2,500 units per year which it stores at $0.50 per unit per annum. The…
A: EOQ = Economic order quantity (EOQ) is a calculation on which companies perform that represents…
Q: The ordering cost for a certain product is $8 per order and the holding cost is $1 per year. The…
A: Ordering Cost :— It is the expenses incurred by company for ordering of product. Holding cost :—…
Q: Rainbow Inc's products are given below. If the company's total labor capacity is 3200 hours/week,…
A: In case of constraint capacity of any factor of production, the production plan is determined by…
Q: The annual demand for an item of raw materials is 4,000 units and the purchase price is expected to…
A: Economic order quantity (EOQ) is the ideal quantity amount an organization should buy to limit stock…
Q: Sandhill, Inc. produces three types of balloons—small, medium, and large—with the following…
A: We can see that large balloons contribute the most per unit but it also takes the most machine hours…
Q: Cobe Company has already manufactured 20,000 units of Product A at a cost of $30 per unit. The…
A:
Q: A product has a daily demand of 60 units. Ordering cost is RO 200, and holding cos EOQ model is…
A: At first we need to find out Economic Order Quantity(EOQ): = 2AQC = 2 x 15,000 x 2003 2,000,000 =…
Q: Tim Taylor has written a self improvement book that has the following cost characteristics: Selling…
A: Break even point = fixed cost/contribution per unit Where, Fixed cost = 98000+22800 = 120800…
Q: Sandhill Co. is considering the introduction of three new products. Per unit sales and cost…
A: Total direct labor hours available = 1600 hours Contribution per unit = Selling price per unit -…
Q: Widgeon CO. Manufactures three products: Bales, Tales, and Wales. The selling prices are, $55, $78,…
A: Contribution margin per unit of limited resource = Contribution margin per unit / Machine hours…
Q: Delectable Foods produces a gourmet condiment that sells for $24 per unit. Variable cost is $6 per…
A: Formula: Contribution margin = sales price - variable cost Deduction of variable cost from selling…
Q: Cobe Company has already manufactured 18,000 units of Product A at a cost of $15 per unit. The…
A: The main objective of every business enterprises is to earn profit by satisfying the customers…
Q: If the price of the material is RO 15 per unit and the annual consumption is 4000 units, the…
A: Economic order Quantity =2×A×OC
Q: Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietropredicts that 50,000 units…
A: ‘’Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: Bryant Company has already manufactured 21,000 units of Product A at a cost of $15 per unit. The…
A: Decision: The company should Process Further. With formula:
Q: Aeon Laketown predicts that 10,000 units of materials will be used during the year. The expected…
A: The question requires calculation of order point, EOQ and total ordering and carrying costs at EOQ…
Q: Electric spark Co., uses 60,000 of component Zima. The cost of placing an order is estimated at…
A: 1) EOQ = 2AO/c Given that, annual demand - 60000 units cost of placing an order is estimated at…
Q: The Sandstone Corporation uses an injection molding machine to make a plastic product, Z35, after…
A:
Q: .. Annual Demand is 450 units. The cost to place an order is $80 and holding cost is 25% per year of…
A:
Q: Stan Fawcett’s company is considering producing agear assembly that it now purchases from Salt Lake…
A: Cost is the price paid for a particular product or service.
Q: SamaCell has a demand of 2,000 cells per year. The cost of each unit is $80, and the inventory…
A: Economic Order Quantity (EOQ) refers to the concept of estimating the ideal quantity that a business…
Q: Khayyam Company, which sells tents, has provided the following information: Sales price per unit…
A: Break even means a point where there is no profit no loss situation.
Q: A manager just received a new price list from a supplier. It will now cost $1.00 a box for…
A: Calculation of economic order quantity: Answer: Economic order quantity is 240 units.
Q: Seah Corporation presents the following data: Usage is 400 units per month, cost per order is P20,…
A: Economic order quantity is that quantity which should be ordered in order to minimize ordering costs…
Q: The Can Division of Crane Company manufactures and sells tin cans externally for $0.70 per can. Its…
A: Minimum Transfer price = Variable Cost + Opportunity cost - Cost saving if sold internally
Q: An SKU has an annual demand of 10,000 units, each costing $15, ordering costs are$80 per order, and…
A: Economic Order Quantity:- EOQ is the minimum quantity that one should order to minimize the ordering…
Q: Massa Machine Tools expects Total sales of 14,000. The price per unit is $6. The firm estimates an…
A: Optimum order size can be calculated with the economic order quantity technique. Eoq is considered…
Q: Garcia Company produces two different types of gauges: a density gauge and a thickness gauge. The…
A:
Q: Republic Industries decides to price delivery services according to the results of a recent…
A: Total delivery cost charged = (No. of orders x $10) + (No. of deliveries x $35) + (Total no. of…
Q: To make a product it costs $24 per liter. The importation cost is a fixed cost of $ 150 additional…
A: Introduction: Average costs: The average total technique sets the value of inventory items by…
Q: Oster Company Ltd. manufactures dusk to dawn lamps. The following are the details of their operation…
A: In the context of the given question, we are required to compute the tradeoffs in costs involved in…
Q: Saved Lincoln, Inc., which uses a volume-based cost system, produces cat condos that sell for $170…
A: Manufacturing cost per unit: Direct materials $21 Direct labor $17 Manufacturing…
Q: Tomball Co. manufactures two chair models, Standard and Premium. Weekly demand is estimated to be…
A: Hi student Since there are multiple subparts, we will answer only first three subparts. If you want…
Q: The annual demand for a certain product is 11,340 units. The company informs you that every time an…
A: The profit of the company will be the main aim of running the operations of the company. The income…
Q: Direct materials cost $ 128 per unit Direct labor cost $ 58 per unit Variable overhead cost $ 36 per…
A:
Q: Tony uses EOQ logic to determine the order quantity for its various components and is planning its…
A: Economic order quantity is that quantity which should be purchased by every entity in its order so…
Q: A company uses components at the rate of 15,000 units per year, which are bought in at a cost of…
A: Holding cost:-This cost incurred in carrying the inventory in-store, therefore it is also known as…
Q: urin Ltd has been asked to give a quote for making a large piece of earth-moving equipment. The…
A: A relevant cost is a cost that only relates to a specific management decision, and which will change…
Q: Salam's company expects its production of pipes will require 600,000 tons of aluminum over its…
A: Economic order quantity is referred to as that level of the inventory which would generate the least…
Q: One of the bulk raw beverages, which Blanchard buys, is gin. Assume that the cost of purchasing…
A: The question is related to Inventory Management. The Economic Order Quantity is that level of…
Q: Ricky Orange’s annual demand is 12,500 units. Ordering cost is $100 per order. Holding cost is…
A: Per unit carrying cost=20%×$50=$10
Q: A company needs a specific type of stored materials, with a quantity of 150,000 pieces, the cost of…
A: This question deals with the calculation of EOQ, number of order and when to supply each order.…
Q: You have developed the following estimates for procuring an item for your manufacturing operations:…
A: Solution:- Calculation of which option is best as follows under:-
Q: ABC company uses 8,000 pens every year. For each pen, cach order cost is $30 and the annual holding…
A: The question is based on the concept of Economic Order Quantity. Economic order quantity or Optimal…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- The annual demand for a particular chemical product is 1,200 units. Suppose that the annualholding cost is $24 per unit, and the ordering cost is $100.Part A: Find the optimal order quantity based on EOQ analysis, and calculate the combinedannual ordering and holding cost.Part B: Now suppose that the store manager finds out that the demand has been underestimated.Specifically, the correct annual demand is 1,500 units. On the other hand, due to operationalrestrictions she cannot change the order quantity and thus use the same order size from part A.How much this error cost the store? (This can also be considered as a penalty for parametermisestimation).Draw and explain EOQ chart with the following data: Requirements per year = 1600 units, Ordering cost = Rs. 100/- per order, Carrying cost = Rs. 5/- per unit, Purchase cost = Rs. 80/- per cost. Assume the missing data.2. Find out the EOQ, Annual ordering cost and annual holding cost from the following information. The demand is 19500 units per year, holding cost is RO 4 per unit for a year and ordering cost is RO 25 order. 3. Find out the ordering cost from the following information, Annual demand is 240 units, holding cost RO 4 per unit for a year and EOQ is 60 units. 4. If the price of the material is RO 15 per unit and the annual consumption is 4000 units, the interest and store keeping charges are 20% of the value and the cost of placing of an order and receiving the goods is RO 60, how much material should be ordered at one time? 5. Alexander pump LLC uses about 75000 valves per year and the usage is fairly constant at 6250 units per month. The valve cost of RO 1.50 per unit when bought in large quantities, and the carrying cost is estimated to be 20% of average inventory investment on an annual basis. The cost to place an order and process the delivery is RO18. It takes 45 days to receive…
- Compute the EOQ given the following information.The annual consumption is 6000 units, ordering cost is RO 60 per order and carrying cost is 20% of the price.The supplier quotes the following prices for the component.No of units bought at timePrice per unitLess then 1000OMR 101000 to 2999OMR 9.53000 and aboveOMR 9What is the optimal order quantity?In the process of finding the optimum order quantity the following costs are obtained per order or per unit annually. Inspection Cost = SR 4 Cost of Interest = SR 4 Insurance Cost = SR 2 Administration Cost = SR 4 Obsolescence = SR 3 Depreciation Cost = SR 2 Breakage Cost = SR 2 Given that the annual Demand is 500,000. Number of order?The cost data for BC Billing Solutions for the year 2020 is as follows: Using the high-low method, express the companys overtime wages as an equation where x represents number of invoices processed. Assume BC has monthly fixed costs of $3,800. Predict the overtime wages if 9,000 invoices are processed. Predict the overtime wages if 6,500 invoices are processed. Using Excel, create a scatter graph of the cost data and explain the relationship between the number of invoices processed and overtime wage expense.
- Compute the EOQ given the following information. The annual consumption is 6000 units, ordering cost is RO 60 per order and carrying cost is 20% of the price. The supplier quotes the following prices for the component. No of units bought at time Price per unit Less then 1000 OMR 10 1000 to 2999 OMR 9.5 3000 and above OMR 9 What is the optimal order quantity?Suppose the relevant carrying cost per unit per year was $20 and the relevant ordering cost per purchase order was $200. Suppose further that Alpha calculates EOQ after incorrectly estimating relevant carrying cost per unit per year to be $10 and relevant ordering cost per purchase order to be $400. Calculate the actual annual relevant total costs of Alpha’s EOQ decision. Compare this cost to the annual relevant total costs that Alpha would have incurred if it had correctly estimated the relevant carrying cost per unit per year of $20 and the relevant ordering cost per purchase order of $200 Calculate and comment on the cost of the prediction error.Tony uses EOQ logic to determine the order quantity for its various components and is planning its orders. The Annual consumption is 80,000 units, Cost to place one order is P1,200, Cost per unit is P 50 and carrying cost is 6% of Unit cost. Find EOQ, No. of order per year, Ordering Cost and Carrying Cost and Total Cost . Prepare a table of validation.
- K Suppose that a company offers quantity discounts. If up to 1,000 units are purchased, the unit price is $12; if more than 1,000 and up to 5,000 units are purchased, the unit price is $8.00; and if more than 5,000 units are purchased, the unit price is $7.50. Develop an Excel template using the VLOOKUP function to find the unit price associated with any order quantity and compute the total cost of the order. Complete the formulas in the spreadsheet below. Select the correct VLOOKUP function in cell C8 to find the unit price for the order quantity. (Type integers or decimals rounded to two decimal places as needed.) 1 2 3 5 6 7 8 6 A B C Purchase Quantity 1 to 1000 1001 to 5000 5001 or more Quantity Ordered Unit Price Total Cost 2400 D Unit Price $ $ $My Kitchen Delights (MKD) is considering two newsuppliers for the jars used in the production process. Th e qualityat both suppliers is equal. Assume that the annual holding costis 30 percent of the unit price. Monthly demand averages 20,000jars. Ordering cost with these two suppliers is $30 per order. Th eprice lists for the suppliers are as follows: (a) Determine the optimal order quantity when usingSupplier A.(b) Determine the optimal order quantity when usingSupplier B.(c) Given MKD’s lack of space, which supplier do yourecommend be used? Justify your answer.Please explain each anwer with formula. Regarding the following information, how many machines would be needed to handle the required volume? Processing time per unit (minute) product demand A B C 1 16000 3 4 2 2 12000 4 4 3 3 6000 5 6 4 4 30000 2 2 1 In order to meet annual demand for all products, how many machines in each type are needed? Based on fixed annual cost (Alternative A with $40,000, B with $30,000 and C with $80,000), which type of machine and how many will cost least to satisfy the demand? Consider the operation of machines 10 hours per day and 200 days a year.