A manufacturer has a production facility that requires 17,544 units of component JY21 per year. Following a long-term contract, the manufacturer purchases component JY21 from a supplier with a lead time of 5 days. The unit purchase cost is $14.4 per unit. The cost to place and process an order from the supplier is $181 per order. The unit inventory carrying cost per year is 15.2 percent of the unit purchase cost. The manufacturer operates 250 days a year. Assume EOQ model is appropriate. If the manufacturer uses a constant order quantity of 1,017 units per order, what is the number of orders per year? Use at least 4 decimal places.
A manufacturer has a production facility that requires 17,544 units of component JY21 per year. Following a long-term contract, the manufacturer purchases component JY21 from a supplier with a lead time of 5 days. The unit purchase cost is $14.4 per unit. The cost to place and process an order from the supplier is $181 per order. The unit inventory carrying cost per year is 15.2 percent of the unit purchase cost. The manufacturer operates 250 days a year. Assume EOQ model is appropriate. If the manufacturer uses a constant order quantity of 1,017 units per order, what is the number of orders per year? Use at least 4 decimal places.
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter10: Cost Analysis For Management Decision Making
Section: Chapter Questions
Problem 13P: Deuce Sporting Goods manufactures a high-end model tennis racket. The company’s forecasted income...
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