A company stocks an item that is consumed at the rate of 35 units each day. Every time an order is placed for new supply, $ 105 must be paid. A unit inventory held in stock will cost $ 0.15 d) What is the total cost if the order quantity is 205 more than EOQ?

A company stocks an item that is consumed at the rate of 35 units each day. Every time an order is placed for new supply, $ 105 must be paid. A unit inventory held in stock will cost $ 0.15 d) What is the total cost if the order quantity is 205 more than EOQ?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 11P: Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35...

See similar textbooks

Related questions

Q: Martin company uses 625 units of a part each year. The cost of placing one order is $8; the cost of…

A: Economic order Quantity (EOQ) = [(2*Annual Demand * Set up cost)/Carrying cost]

Q: A company plans to sell 24,000 units of product R next year. Opening inventory of R is expected to…

A: We have the following information: A company plans to sell 24,000 units of product R next year…

Q: Star Ltd operates a retail business where Purchases are sold at cost plus 25%. The information…

A: Working notes :…

Q: A Store has annual demand of 29,000 units. The annual carrying cost for a unit is $15.5, and the…

Q: Manitoba Transport collects 75% of its monthly sales immediately and the rest at the end of the…

A: Break-Even Sales - Break-even sales defined as the sales at which the company covers only the…

Q: Bulldogs Inc. expects to use 48,000 boxes of chocolate per year costing P12 per box. Inventory…

A: Total Boxes = 48,000 Cost per Box = P12 Inventory carrying cost = 20% Safety stock = 2,400 Order per…

Q: Electronics Ltd manufactures air conditioners. It purchases 200,000 units of a particular type of…

A: I am answering the first three sub-parts of the question as per bartleby policies. Please submit the…

Q: Iwans The Crandall store begins each week with 360 phasers in stock. This stock is depleted each…

A: Hi student Since there are multiple subparts, we will answer only first three subparts. If you want…

Q: A local retailer anticipates an annual demand 15000 units of a product. The retailer allows…

A: The inventory management aims to accomplish to reach satisfaction on the custom services…

Q: Princeton GI Roofing Ltd wants to reduce its total inventory cost using the appropriate EOQ model.…

A: SOlUTION 1-NO OF ORDERS IN YEAR = ANNUAL DEMAND / EOQ. 2- AVERAGE INVENTORY LEVEL = EOQ / 2 3-…

Q: Morning Glory buys cereal directly from the manufacturer for $20 per case. The company’s annual…

A: Economic order quantity: It can be defined as an optimal quantity that is purchased by the company…

Q: Al Khalid LLC are the manufacturers of Lamps. The following are the details of their operation…

A: Reorder level = Maximum lead time * maximum consumption = 10 weeks * 200 lamp per week Reorder level…

Q: Hi Tech Corporation (HTC) expects to order 295,000 memory chips for inventory during the coming…

A: Step 1 Economic order quantity (EOQ) is the ideal order quantity a company should purchase to…

Q: Oster Company Ltd. manufactures dusk to dawn lamps. The following are the details of their operation…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Leaky Pipe, a local retailer of plumbing supplies, faces demand for one of its SKUs at a constant…

A: Comment- Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the…

Q: Enrun Corporation expects to order 140,000 memory chips for inventory during the coming year, and it…

A: Economic Order Quantity - It is an order quantity that company should purchase to minimize the…

Q: Malburn Construction Ltd. Manufactures and distributes window frames. The company uses 600,000 metal…

A: We need to use economic order quantity(EOQ) formula to calculate order size to minimize inventory…

Q: Scouts Corp. projects its sales to be 1,000 units this year. As a result of holding inventories,…

A: Part 1:-Reorder Point It is the level of inventory at which we need to replenish the inventory…

Q: A company is presently ordering on the basis of an EOQ. The demand is 10,000units a year, unit cost…

A: EOQ (Economic Order Quantity):-EOQ is the minimum order quantity that one should order to minimize…

Q: Carrefour estimates an annual demand of a grocery product at 4800 kgs. It costs RO 100 to make and…

A: Inventory level at which business should place order is known as reorder point in business.

Q: What is the economic ordering quantity for chips?

A: The optimum units of any given product that must be ordered such that its ordering and holding…

Q: Scouts Corp. projects its sales to be 1,000 units this year. As a result of holding inventories,…

Q: calculate the maximum level of stock. a. 1120 units b. 1102 units c. 1063 units d. 1302 units

A: EOQ ( Economic Order Quantity)

Q: What is BBOS’s total inventory cost per year,

A: The optimum units of any given product that must be ordered such that its ordering and holding…

Q: Nowlin Pipe & Steel has projected sales of 6,400 pipes this year, an ordering cost of $5 per order,…

A: The conceptual formula used:

Q: Furnco sells office chairs. Annual demand is normally distributed with a mean of 1040 chairs and a…

A: No of orders to be placed = A ÷ EOQ where A = annual units demanded EOQ = economic order…

Q: Carrefour estimates an annual demand of a grocery product at 4800 kgs. It costs RO 100 to make and…

A: Level of inventory at which business should place order for the inventory is known as Reorder point.

Q: Green Tees, an on line retailer of t-shirts, orders 100,000 t-shirts per year from its manufacturer.…

A: Ordering Cost is a type of expenditure used in computation of Economic Order Quantity (EOQ). It…

Q: Given the following informations annual sales in units 30,000 cost of placing an…

A: a.Calculation of EOQ:

Q: Crawford Steel Corp. buys inventory of 40,000 units annually. The purchase price per unit is $3.00…

A: Inventory Management: Inventory management tools like the economic order quantity, the reorder level…

Q: how many weeks are there between each optimal order quantity?

A: Economic Order Quantity (EOQ) is the inventory level at which the company is able to minimize the…

Q: A trading company expects to sell 15,000 mixers during the coming year. The cost of storing a mixer…

A: Economic order quantity: Economic order quantity is the method that helps to determine the best…

Q: Alpha retail store predicts an annual demand of 4920 kgs of a food product. It costs RO 100 to make…

A: In order to minimise the total inventory costs that includes ordering costs and inventory holding…

Q: Bulldogs Inc. expects to use 48,000 boxes of chocolate per year costing P12 per box. Inventory…

A: Solution:- Carrying cost of inventory means the cost incurred in order to store the inventory.

Q: Customers at furniture store demand an average of 6,000 bookcases per year. Each time an order is…

A: The economic order quantity is the best order quantity for a corporation to purchase in order to…

Q: A company stocks an item that is consumed at the rate of 30 units each day. Every time an order is…

A: As per Bartleby guideline, if questions are interlinked then first three sub parts to be answered.…

Q: Based on an EOQ analysis (assuming a constant demand), the optimal order quantity is 2,500. The…

A: Average inventory level =Optimal order quantity2=2,500 units2=1,250 units

Q: A company stocks an item that is consumed at the rate of 50 units per day. It costs the company P20…

Q: Suppose that the R&B Beverage Company has a soft drink product that shows a constant annual demand…

A: Economic order quantity (EOQ) is a computation that businesses use to determine their ideal order…

Q: Suppose Stanley's Office Supply purchases 50,000 boxes of pens every year. Ordering costs are $100…

A: Calculate the EOQ: EOQ = √((2x Annual demand x ordering cost)/ carrying cost per unit EOQ =…

Question

A company stocks an item that is consumed at the rate of 35 units each day. Every time an order is placed for new supply, $ 105 must be paid. A unit inventory held in stock will cost $ 0.15

d) What is the total cost if the order quantity is 205 more than EOQ?

e) What is the optimum number of orders (rounded to the closest integer) that the company has to place each year?

Assume that the company has a standing policy of not allowing shortages in demand.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

EOQ :

Calculation of EOQ:

Solution E.

Solution D.

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

A company stocks an item that is consumed at the rate of 50 units per day. It costs the company P20 each time an order is placed. An inventory unit held for a week will cost P0.35. (a) Determine the optimum inventory policy assuming a lead time of 1 week. (b) Determine the optimum number of orders per year (365 days a year).
A store sells a product that has the annual demand of 16,156 units. It purchases the product from supplier A for $74.4 per unit. The unit inventory carrying cost per year is 14 percent of the unit purchase cost. The cost to place and process an order from the supplier is $107 per order. Supplier A has a delivery lead time of 7 days. The store operates 300 days a year. Assume EOQ model is appropriate. What is the optimal total annual inventory and purchase cost for the store? Use at least 4 decimal places.
A company stocks an item that is consumed at the rate of 30 units each day. Every time an order is placed for new supply, $ 120 must be paid. A unit inventory held in stock for one week will cost $ 0.14. What is the economic order quantity (EOQ)? What is the cycle time for the EOQ? What is the total annual cost for the EOQ? What is the total annual cost if the order quantity is 200 more than EOQ? What is the optimum number of orders (rounded to the closest integer) that the company has to place each year? Assume that the company has a standing policy of not allowing shortages in demand.
An inventory item has a demand of 10,000 units per month. The cost of each unit is $6, and the interest on tied-up money is 10%. The average ordering cost is $250 per order. a) What is the EOQ? units (round your response to the nearest integer). b) What is the optimal number of orders per year? to the nearest integer) c) What is the optimal number of days between any two orders? your response to the nearest integer) d) What is the annual holding cost? $ nearest integer) orders (round your response e) What is the total annual cost of the inventory system? $ to the nearest integer) days (round per year (round your response to the (round your response
Suppose that your company sells a product for which the annual demand is 10,000 units. Holding costs are $1.00 per unit per year, and setup costs are $200 per order. What is the minimum total stock administration cost for the product?
What is the EOQ for a firm that sells 5,800 units when the cost of placing an order is $5.20 and the carrying costs are $4.00 per unit? Round your answer to the nearest whole number. units How long will the EOQ last? Use the rounded value from the previous question. Assume 365 days in a year. Round your answer to the nearest whole number. days How many orders are placed annually? Assume 365 days in a year. Use the rounded value from the previous question. Round your answer to the nearest whole number. orders per year As a result of lower interest rates, the financial manager determines the carrying costs are now $2.2 per unit. What is the new EOQ? Round your answer to the nearest whole number. units What is the annual number of orders? Assume 365 days in a year. Use the rounded values of the new EOQ and duration of the new EOQ in your calculations. Round your answer to the nearest whole number. orders per year
Ndapandula Investment CC sells about 12 000 bags of poulty grain per year. The Holding costs are N$ 50.00 per bag per year, and the Ordering costs are about N$ 100.00 per order. The Investment company operates 280 days per year. Determine: I. The optimal economic order quantity. II. The total annual inventory costs III. If the demand increases to 13 000 bags per year, what will the total annual inventory costs amount to?
1) The two most important questions as an inventory manager is how much units to order and when to order. You are working as an Inventory Manager in a manufacturing company. You have forecasted that annual requirement of a part is 72,000 units. The order cost is $1000 per order, the holding rate is 20 percent and the part cost is $200 per unit. Your firm operates 360 days a year. The lead time is 06 days. Determine: Economic Order Quantity (EOQ) Annual holding cost Annual order cost, and Annual total inventory cost? Calculate the re order point.
Assume Wyteboard Corp. markers uses 1,440,000 gallons of ink each year. Assume Palmer will order the ink at a rate of P2 per gallon plus a fixed cost of P100 per order. At cost, the firm's carrying cost is 20% of the inventory value. What is Wyteboard's minimum costs of ordering and holding inventory? SHOW THE ANSWER IN A GOOD ACCOUNTING FORM
Nowlin Pipe & Steel has projected sales of 19,600 pipes this year, an ordering cost of $5 per order, and carrying costs of $1.60 per pipe. a. What is the economic ordering quantity? Economic ordering quantity b. How many orders will be placed during the year? Number of orders orders c. What will the average inventory be? Average inventory units units
A company is presently ordering on the basis of an EOQ. The demand is 10,000units a year, unit cost is $10, ordering cost is $30, and the cost of carrying inventoryis 20%. The supplier offers a discount of 3% on orders of 1000 units or more. Whatwill be the saving (loss) of accepting the discount?
Harrowing Company has the following information: Annual demand =3,500 units Order size = 500 units Ordering cost per order =$400 Carryingcosts per unit for one year =$40 Lead time (maximum 20 days)=10days Maximumd use =25 units Work year =250days Required: a.Determine the economic order quantity for Harrowing b. Determine the reorder point. c. What is the safety stock needed to prevent stockouts?