1. Calculate Sk8's E0Q for the wheel bearing. 2. Calculate Sk8's annual relevant ordering costs for the E0Q calculated in requirement 1. 3. Calculate Sk8's annual relevant carrying costs for the E0Q calculated in requirement 1. 4. Assume that demand is uniform throughout the year and known with certainty so there is no need for safety stocks. The purchase-order lead time is half a month. Calculate Sk8's reorder point for the wheel bearing. Required

1. Calculate Sk8's E0Q for the wheel bearing. 2. Calculate Sk8's annual relevant ordering costs for the E0Q calculated in requirement 1. 3. Calculate Sk8's annual relevant carrying costs for the E0Q calculated in requirement 1. 4. Assume that demand is uniform throughout the year and known with certainty so there is no need for safety stocks. The purchase-order lead time is half a month. Calculate Sk8's reorder point for the wheel bearing. Required

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 17P

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Order Point Pershing, Inc. expects daily usage of 500 lb of material X, an anticipated lead time of seven days, and a desired safety stock of 2,500 lb. a. Determine the order point. b. Determine the number of pounds to be issued from safety stock if the new order is four days late.
Ranger Industries has provided the following information at June 30: Other information: Average selling price, 196 Average purchase price per unit, 110 Desired ending inventory, 40% of next months unit sales Collections from customers: In month of sale20% In month after sale50% Two months after sale30% Projected cash payments: Inventory purchases are paid for in the month following acquisition. Variable cash expenses, other than inventory, are equal to 25% of each months sales and are paid in the month of sale. Fixed cash expenses are 40,000 per month and are paid in the month incurred. Depreciation on equipment is 2,000 per month. REQUIREMENT You have been asked to prepare a master budget for the upcoming quarter (July, August, and September). The components of this budget are a monthly sales budget, a monthly purchases budget, a monthly cash budget, a forecasted income statement for the quarter, and a forecasted September 30 balance sheet. The worksheet MASTER has been provided to assist you. Ranger Industries desires to maintain a minimum cash balance of 8,000 at the end of each month. If this goal cannot be met, the company borrows the exact amount needed to reach its goal. If the company has a cash balance greater than 8,000 and also has loans payable outstanding, the amount in excess of 8,000 is paid to the bank. Annual interest of 18% is paid on a monthly basis on the outstanding balance.
Refer to Cornerstone Exercise 3.4 for data on Dohini Manufacturing Companys purchasing cost and number of purchase orders. The controller for Dohini Manufacturing ran regression on the data, and the coefficients shown by the regression program are: Required: 1. Construct the cost formula for the purchasing activity showing the fixed cost and the variable rate. 2. If Dohini Manufacturing Company estimates that next month will have 430 purchase orders, what is the total estimated purchasing cost for that month? (Round your answer to the nearest dollar.) 3. What if Dohini Manufacturing wants to estimate purchasing cost for the coming year and expects 5,340 purchase orders? What will estimated total purchasing cost be? (Round your answer to the nearest dollar.) What is the total fixed purchasing cost? Why doesnt it equal the fixed cost calculated in Requirement 1?
Based on an EOQ analysis (assuming a constant demand), the optimal order quantity is 2,500. The company desires a safety stock of 500 units. A 5-day lead time is needed for delivery. Annual inventory carrying costs equal 25% of the average inventory level. The company pays P4 per unit to buy the product, which it sells for P8. The company pays P150 to place a detailed order, and the monthly demand for the product is 4,000 units. Compute for the annual inventory carrying cost.
Oster Company Ltd. manufactures dusk to dawn lamps. The following are the details of their operation during 2021: Average monthly market demand 2,000 lamps Ordering costs $ 200 per order Inventory carrying costs 20% per annum Cost of lamps $ 1000 per lamp Normal usage 100 lamps per week Minimum usage 50 lamps per week Maximum usage 200 lamps per week Lead time to supply 4 - 6 weeks Compute: Economic order quantity. Maximum level of stock. Minimum level of stock. Re-order level of stock. What tradeoffs in costs are involved in computing the Economic Order Quantity?
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Princeton GI Roofing Ltd wants to reduce its total inventory cost using the appropriate EOQ model. Currently, it orders 2170 thick gauge roofing sheets per batch. Annual demand is projected to be 43420 sheets. The ordering cost is Php 120. The average carrying cost is equivalent to 20% of the unit acquisition price of Php 400. Lead time is three days. Assume a 365 day year. Answer the following:g. Based on its current practice, how many times does it order in a year? Express your answer up to the hundredths place (two decimal places). h. Based on its current practice, what is its average inventory level? Express your answer up to the nearest integer or whole number.i. Based on its current practice, what is the company's total annual inventory cost? Express your answer up to the nearest centavo.
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