Medical Laser Equipment

1. a. The simulation indicates that 584 is the optimum stocking quantity. Daily profit at this stocking quantity is $331.4346.

One of specialty’s managers felt that the profit potential was so great that the order quantity should have a 70% chance of meeting demand and only a 30% chance of any stock-outs. What quantity would be ordered under this policy, and what is the projected profit under the three sales scenarios?

This answer can be done in tabular form as well, with the interest on inventory appearing as a new column. If one order is placed a year, the average inventory is 1,000 kegs, worth $40,000, with annual interest charges (1.5 x 12 = 18%) of $7,200. Other interest costs are calculated in a similar fashion, adjusted for average inventory.

inventory using the cost method and did not change the method used during the current

Second, the manufacturing order costs for non-stocked items was calculated by dividing total manufacturing order costs for non-stocked items by the number of orders for non-stocked products. Non-stocked products have additional costs associated with processing orders that went above and beyond the costs associated with a stocked product. The third step involved determining what the S"A allocation factor would be for calculating the S"A volume related costs. This allocation factor would then be applied to manufacturing COGS. The fourth and final step involved the calculation of the operating profit based on backing out volume related costs from sales revenues followed by deducting S"A and manufacturing order costs from the resulting gross margin to arrive at a operating profit.

The economic order quantity is used for this situation because it shows the number of pairs of laces that can be added to the inventory each time an order is placed to minimize the holding and ordering costs. It provides the information that can be used to control the inventory levels and costs.

We first predict the annual demand for the year 1972 based on trend for 4 months of 1972 based on corresponding months of 1971.

To find out all available options and their pros and cons my team has put together the following analysis:

Lasers in the classes IIIa and IIIb are capable of causing damage to the eye when a laser in one of these classes is directly exposed to a person’s eye, or in some cases, when reflecting off of a smooth surface. Class IIIa lasers have a power output of less than 5 mW, whereas class IIIb lasers can have a power output between 5 and 500 mW, and thus high-power class IIIb lasers can be a fire hazard and cause minor burns to the skin.

The cost of implementation of the options: It deals with the technicians and the reduction in time of implementation. This leads to better customer service and increases efficiency of the technicians. Also considering a customer base reduction of 5% (Exhibit 2), $1 million dollars will be a prudent investment.

We first predict the annual demand for the year 1972 based on trend for 4 months of 1972 based on corresponding months of 1971.

The cost-volume-profit analysis is a form of cost accounting and an important part of this analyses is the break-even point.

Since the warehouses hold finished goods and is considered to be an inventory, therefore it is crucial to minimise the capacity of the warehouses to achieve greater financial success. Appendix (2) shows that the average queue size of both warehouses is nearly 16 units whereas the maximum capacity of the warehouses is 50 units, thus the capacity of the warehouses are efficiently used. Average queue time of the available warehouses is another factor that must be taken in the prior considerations. An average of 34 hours is spent to deliver orders from warehouses to customers and this can be nearly 30% of the whole time spent in system. The rule of thumb declares that once the goods are manufactured, it must be delivered as

Mr. Busfield accepting the possession at his direct cost would entail his effort to find the Economic Order Quantity for measuring cups. This is accomplished by combining the inventory carrying and ordering cost. In the event of calculating the EOQ through ordering and maintaining inventory product quantities have to be at a stable demand and cost level throughout the year. (Bowersox, D. J., Closs, D. J., Cooper, M. B., & Bowersox, J. C. p. 156. 2013) Mr. Busfield’s company would have to calculate this level accurately from the information that he gathers from the cost of orders products, annual inventory carrying cost, annual sales volume, units; and cost per unit. There the calculations would be calculated from figures from the previous question of finding the reorder point for spatulas. (R=DXT+SS) calculated from = 400 x 14 + 500 = 6,100 (Bowersox, D. J., Closs, D. J., Cooper, M. B., & Bowersox, J. C. p. 157. 2013). To find the economic order quantity (EOQ) would be the square root of the product of the numerator two times order cost and demand divided by the product of the annual total cost. “Inventory Carrying Costs = (2,797/2) x 0 .75 x 12% = $ 125.87. (44,000/2797) = Order costs= 16 orders x $8 / order = $ 128.00. Transportation Costs = 44,000 units x $0 .05 / unit = $ 2,200. Total Cost (EOQ = 2,797 units) $ 2,453.87 /year. Annual total cost with order quantities of 4,000 cups (Ultimate Calculators 2010).”

Once they have their inventory under control, the purchasing department should complete a very detailed cost analysis to determine the total inventory cost, including all aspects and hidden fees. Once they have the