28- The White Rose Company uses the EOQ model to manage the inventory of their basic material. It is known that the ordering cost per order is BD 280, the annual holding cost per unit of inventory is BD 10, the annual demand is 140,000 units, the lead time is 2 days and the Company operates 350 days a year. Find the number of orders per year when the economic order quantity is ordered. A. 16 B. 10 C. 25 D. 50

28- The White Rose Company uses the EOQ model to manage the inventory of their basic material. It is known that the ordering cost per order is BD 280, the annual holding cost per unit of inventory is BD 10, the annual demand is 140,000 units, the lead time is 2 days and the Company operates 350 days a year. Find the number of orders per year when the economic order quantity is ordered. A. 16 B. 10 C. 25 D. 50

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter15: Managing Short-term Assets

Section: Chapter Questions

Problem 18PROB

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Problem 2 Abner Company has an annual demand of 13,000 urits of Material A. The cost per unit is P14. The order cost is P200 per order, and the annual inventory carrying cost per unit is P5.20. Assume that the units will be required evenly throughout the year. Required: Compute for the following: a. Economic order quantity b. Number of orders in a year. c. Average inventory based on economic order quantity. d. Total carrying cost and total ordering costs at economic order quantity.
2. The ABC Company consumes inventory of 67,500 units of components per year. The carrying cost per unit is RO 1.50. The fixed order cost is RO 25 per order. The production planning is 365-day year. a. What is the Economic Order Quantity (EOQ)? Interpret. 219 S b. Calculate and interpret the optimal number of orders to be placed. the ida c. If it takes five days to receive an order from suppliers, at what inventory level should ABC Company place another order.Interpret.
2. Hamid Company consumes inventory of 100,000 units of components per year. The carrying cost per unit is RO 3.50. The fixed order cost is RO 20 per order. The production planning is 365-day year. The delivery time is three days. a. Calculate and interpret the Economic Order Quantity (EOQ). b. At what inventory level should Hamid Company place another order. Interpret.
16. The ordering costs related to a product are P12.50 per order. The cost of carrying one item of inventory for one year is P16. The business sells 40,000 units of the product evenly throughout the year. At EOQ, total ordering costs per year and total carrying costs per year, respectively, must be A. P1,562.50 ; P1,562.50 C. P2,000 ; P2,000 D. P4,000 ; P4,000 B. P1,562.50 ; P2,560.00
C E H The ABC Semi Conductor Company purchase 40,000 units of mother board each year at a cost of $30.00 per unit. The ordering cost is $10.00 per order, and the annual holding cost is estimated at 15% of the unit value. 1. What is the EOQ for the ABC? 2. What is the total annual inventory cost for the mother board if it is ordered in economic quantities? 3. How many orders should be placed each year? D Demand 40000 units H Holding Cost S Ordering Cost 4.5 $/unit/yr 10 $/order Case 1 Case 2 Case 3 Case 4 Case 5 Case 6 Case 7 Quantity Average Total Holding Cost Total Ordering Cost Total COST = 100 200 300 400 500 1000 2000
29- The economic production quantity (EPQ), produced by Al-Anaaqa Company, is 2200 units. The set up cost for each production run is BD 45.375. The annual holding cost per unit of inventory is BD 8 and the annual demand is 160,000 units. Find the total annual costs of inventory if the maximum inventory is 825 units. A. 3,600 B. 12,100 C. 6,600 D. 3,300
Activities/Assessments: Activity 9 Solve the following EOQ model problems: 1. Each year, Y Company purchases 20,000 units of an item that costs P 640 per unit. The cost of placing an order is P 480, and the cost to hold the item in inventory for one year is P 150. a. Determine the EOQ. b. What is the average inventory level, assuming that the minimum inventory level is zero? c. Determine the total annual ordering cost and the total annual holding cost for the item if the EOQ is used. 2. A toy manufacturer uses approximately 32,000 silicon chips annually. The chips are used at a steady rate during the 240 days the plant operates. Annual holding cost is P27 per chip and ordering cost is P1,080. Lead time = 1 week. a. Find the EOQ. b. Find the reorder point. c. What would be your ordering policy for this item? d. Find the total annual cost of ordering and carrying silicon chips. 3. A large bakery buys sugar in 50-kg bags. The bakery uses an average of 1,344 bags a year. Preparing an order…
PROBLEM 5 Using the EOQ Model, Tokyo Company computed the economic order quantity for one of the materials it uses in its production to be 4,000 units. The Company maintains safety stock of 300 units. The quarterly demand for the material is 10,000 units. The order cost is 200 per order. The purchase price of the material is P4. The annual Inventory carrying cost is equal to 25% of the purchase price. 1. What is the annual inventory carrying cost? 2. The total inventory order cost per year is?
5. Economic Order Quantity Jimin Company requires 40,000 units for its signature product BTS. The units will be used evenly throughout the year. The cost to place one order is P 20 while the cost to carry the inventory for one year is P 0.40 per unit. REQUIRED: A) Determine the optimal order quantity (EOQ). B) How many orders should be placed within the year? C) How often should the units be ordered within a year? D) Determine the average inventory in units.
PROBLEM 5 Using the EOQ Model, Tokyo Company computed the economic order quantity for one of the materials it uses in its production to be 4,000 units. The Company maintains safety stock of 300 units. The quarterly demand for the material is 10,000 units. The order cost is 200 per order. The purchase price of the material is P4. The annual Inventory carrying cost is equal to 25% of the purchase price. Note: USE AN EOQ MODEL - THE ANSWER OF 1 & 2 SHOULD BE THE SAME 1. What is the annual inventory carrying cost? 2. The total inventory order cost per year is?
14- If economic order quantity is 1,500 units and consumption in units for one year are 15,000 units, then number of orders in a year will be: a. 6 orders b. 10 orders c. 5 orders d. 12 orders
on 1 A firm uses 500 units of a product per year on a continuous basis. The product has a carrying cost et answered of $35 per unit per year and order costs of $270 per order. It takes 28 days to receive a shipment after an order is placed and the firm requires a safety stock of 4 days usage in inventory (year ed out of 10.00 has 365 days). g question اذا كان عد د الوحدات عد د صحيح، أكتبها كما هي بدون منازل عشرية اذا لم یكن عد د الوحدات عد د صحيح، وكان عد د الوحدات يحتوي على اعشار، أكتب الوحدات شاملة منزلتين عشريتين، مثلا ظهر على الالة الحاسبة 11.23 lys 11.2265 a. Determine the reorder point. reorder point units b. Determine the economic order quantity. EOQ (5:Numerical:=87.83:1.11)}units Ps Pr