Homework Help is Here – Start Your Trial Now!
Business
Accounting
Oleg Blokhin Sportwear uses, for the goalkeeper gloves, a time sensitive and unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled. He uses 250 pounds per month of the chemical, estimates the holding cost to be £4.25 (because of spoilage), and estimates order costs to be £20 per order. The cost schedules of four suppliers are as follows: + Quantity 1-49 50-99 100-149 150-249 250-349 350-499 500+ Vendor 1 200-399 400-499 500+ Quantity 1-99 100-199 Price/LB (£) 36.00 34.75 33.55 32.35 Vendor 3 31.25 30.50 30.00 Price/LB (£) 34.50 33.75 32.00 31.25 30.50 Vendor 2 Quantity 1-74 75-149 150-224 225-299 300-374 375-449 450+ Price/LB (£) 35.00 34.00 32.80 31.90 31.40 30.90 30.50 Vendor 4 Quantity 1-199 200-399 400-599+ 600+ Price/LB (£) 36.00 34.00 32.00 30.00

Oleg Blokhin Sportwear uses, for the goalkeeper gloves, a time sensitive and unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled. He uses 250 pounds per month of the chemical, estimates the holding cost to be £4.25 (because of spoilage), and estimates order costs to be £20 per order. The cost schedules of four suppliers are as follows: + Quantity 1-49 50-99 100-149 150-249 250-349 350-499 500+ Vendor 1 200-399 400-499 500+ Quantity 1-99 100-199 Price/LB (£) 36.00 34.75 33.55 32.35 Vendor 3 31.25 30.50 30.00 Price/LB (£) 34.50 33.75 32.00 31.25 30.50 Vendor 2 Quantity 1-74 75-149 150-224 225-299 300-374 375-449 450+ Price/LB (£) 35.00 34.00 32.80 31.90 31.40 30.90 30.50 Vendor 4 Quantity 1-199 200-399 400-599+ 600+ Price/LB (£) 36.00 34.00 32.00 30.00

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints
Section: Chapter Questions
Problem 17E
See similar textbooks
icon
Related questions
Question

Can you please explain which quantity should be ordered, and which supplier should be used?

Oleg Blokhin Sportwear uses, for the goalkeeper gloves, a time sensitive and unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled. He uses 250 pounds per month of the chemical, estimates the holding cost to be £4.25 (because of spoilage), and estimates order costs to be £20 per order. The cost schedules of four suppliers are as follows: + Vendor 1 Quantity 1-49 50-99 100-149 150-249 250-349 350-499 500+ Price/LB (£) 36.00 34.75 33.55 32.35 31.25 30.50 30.00 Vendor 3 Quantity 1-99 100-199 200-399 400-499 500+ Price/LB (£) 34.50 33.75 32.00 31.25 30.50 Vendor 2 Quantity 1-74 75-149 150-224 225-299 300-374 375-449 450+ Price/LB (£) 35.00 34.00 32.80 31.90 31.40 30.90 30.50 Vendor 4 Quantity 1-199 200-399 400-599+ 600+ Price/LB (£) 36.00 34.00 32.00 30.00
Transcribed Image Text:Oleg Blokhin Sportwear uses, for the goalkeeper gloves, a time sensitive and unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled. He uses 250 pounds per month of the chemical, estimates the holding cost to be £4.25 (because of spoilage), and estimates order costs to be £20 per order. The cost schedules of four suppliers are as follows: + Vendor 1 Quantity 1-49 50-99 100-149 150-249 250-349 350-499 500+ Price/LB (£) 36.00 34.75 33.55 32.35 31.25 30.50 30.00 Vendor 3 Quantity 1-99 100-199 200-399 400-499 500+ Price/LB (£) 34.50 33.75 32.00 31.25 30.50 Vendor 2 Quantity 1-74 75-149 150-224 225-299 300-374 375-449 450+ Price/LB (£) 35.00 34.00 32.80 31.90 31.40 30.90 30.50 Vendor 4 Quantity 1-199 200-399 400-599+ 600+ Price/LB (£) 36.00 34.00 32.00 30.00
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question

Explain the process followed and the result

Solution
Bartleby Expert
SEE SOLUTION
Follow-up Question

Vendor 1

Quantity

Price/LB (£)

1-49

36.00

50-99

34.75

100-149

33.55

150-249

32.35

250-349

31.25

350-499

30.50

500+

30.00

Vendor 3

Quantity

Price/LB (£)

1-99

34.50

100-199

33.75

200-399

32.00

400-499

31.25

500+

30.50

Vendor 2

Quantity

Price/LB (£)

1-74

35.00

75-149

34.00

150-224

32.80

225-299

31.90

300-374

31.40

375-449

30.90

450+

30.50

Vendor 4

Quantity

Price/LB (£)

1-199

36.00

200-399

34.00

400-599+

32.00

600+

30.00

 

 

Identify and discuss what quantity should be ordered, and which supplier should be used? 

Solution
Bartleby Expert
SEE SOLUTION
Follow-up Question

 

Discuss factor(s) that should be considered besides total cost. 

Solution
Bartleby Expert
SEE SOLUTION
Follow-up Question

Discuss factor(s) that should be considered besides total cost. 

Solution
Bartleby Expert
SEE SOLUTION
Knowledge Booster
Costing for Spoilage, rework and scrap
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
  • SEE MORE QUESTIONS
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS