Sammy Sausages is a sausage processing business run by Samuel Smith. The sausages are made fresh every day and delivered to the fast food outlets the same day. The prime ingredient is premium quality minced beef. Each day 708 kilograms is used to produce 700 kilograms of sausages. An administrative assistant who is paid an hourly rate of $28 does the order processing. She takes 45 minutes to process each order. The minced meat is bought at a price of $4,000 per tonne. The cost of refrigerating the meat is $1 for every 10 kilos. The meat may be refrigerated for 14 days as Sam wants to maintain a high standard and freshness with his products. He also tries to maintain a safety stock of 2 days. The order lead-time is 1 day. The company requires a 10% return on investment (ROI). Determine Sammy Sausages’ Economic Ordering Quantity (EOQ). Show your calculations. Advise Samuel on whether he should implement the calculated EOQ
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Sammy Sausages is a sausage processing business run by Samuel Smith. The sausages are made fresh every day and delivered to the fast food outlets the same day. The prime ingredient is premium quality minced beef. Each day 708 kilograms is used to produce 700 kilograms of sausages.
An administrative assistant who is paid an hourly rate of $28 does the order processing. She takes 45 minutes to process each order.
The minced meat is bought at a price of $4,000 per tonne. The cost of refrigerating the meat is $1 for every 10 kilos.
The meat may be refrigerated for 14 days as Sam wants to maintain a high standard and freshness with his products. He also tries to maintain a safety stock of 2 days.
The order lead-time is 1 day.
The company requires a 10%
- Determine Sammy Sausages’ Economic Ordering Quantity (EOQ). Show your calculations.
- Advise Samuel on whether he should implement the calculated EOQ
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