Explain two potential issues that may develop when using the trading EOQ model with quantity discount.
Q: When a customer allows the supplier to manage inventory policy for an item or group of items.
A: Inventory management refers to the process including ordering, storing, and using a company's…
Q: Explain what will happen to the ordering cost and the holding cost as the order quantity increases…
A: Ordering costs are the values incurred on ordering and getting a new purchase of inventories and…
Q: Why do the basic EOQ model variations not include theprice of an item?
A: Economic order quantity or EOQ refers to the model which helps in calculating the optimal level that…
Q: How must the application of the basic EOQ model bealtered in order to reflect quantity discounts?
A: Before getting into the question, let’s first understand the meaning of Basic EOQ Model. EOQ Model:…
Q: Explain the one-time purchasing decision and the single-period inventory model
A: A single period inventory model is a professional scenario met by businesses that demand seasonal or…
Q: Beginning inventory, purchases, and sales for an inventory item are as follows: Sep. 1 Beginning…
A: The detailed solution is given in Step 2.
Q: Complete the invoice itemization by finding the total amount (in $) for each item, the merchandize…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Al-Haidari Catering Company planned to purchase its needs from one of the materials involved in its…
A: Economic Order Quantity is that level of inventory at which ordering cost and carrying cost are…
Q: Explain the difference between a fixed-quantity and a fixed-period inventory system?
A: Introduction- Inventory is a phrase that relates to all the goods, goods, goods, and materials that…
Q: Explain two problems that may arise when using standard EOQ model when quantity discounts are…
A: The economic order quantity (EOQ) refers to the ideal order quantity, an organization should…
Q: Explain the major assumptions of the basic EOQ model.
A: Economic order quantity is quantity of order that minimizes the ordering and holding costs as well.…
Q: How can the implementation of the EOQ base model be changed to represent discounts in quantity?
A: Conferring to the elementary Economic Order Quantity (EOQ) standard, the total inventory cost is…
Q: Explain why it is not necessary to include product cost {priceor price times qua ntity) in the EOQ…
A: The EOQ represents the calculation of companies representing the ideal size of the order, for…
Q: Discuss two potential issues that may develop when using the traditional EOQ model with quantity…
A: The economic order quantity (EOQ) is the minimum quantity of inventory that an organization should…
Q: Calculate the reorder point
A: Given Data Demand per week = 800 units Annual demand =800×52=41600 Ordering cost (S) = $72 Cost…
Q: Explain the main cost types used in inventory analysis and how they relate to one another.
A: Inventory management covers three main costs associated with inventory: purchasing, handling, and…
Q: The bookstore expects an annual demand of 2,500 units. It costs $10 to place an order, and the…
A: Given: Order Quantity Rate per Unit 0 to 200 $4.00 201 to 2,000 $3.50 2,001 or…
Q: Describe the major cost categories used in inventory analysis and their functional relationship to…
A: Stock examination is a method for comprehending the stock/item mix in conjunction with knowledge on…
Q: Distinguish between a fixed-order-quantity system andfixed-time-period system and give an example of…
A: Fixed order quantity Fixed order quantity sometimes Q-system refers to the system in which the per…
Q: Micro-Electronics Warehouse Headset and Webcam Sale Item Type Reg. Price After Savings Price…
A: Given information: Item Type Reg. Price After Savings price Buddy Chat 200 Headset…
Q: Explain what are the type of demand distribution effects on inventory situations?
A: There are several types of demand distribution forecasting models that are used, including…
Q: Explain the quantity of economic order (EOQ) and its effect on operating costs.
A: Economic order quantity(EOQ) is the ideal request amount an organization should buy to minimize…
Q: Motif is a Turkish electrotechnical company which operates a warehouse in Ankara. The company is…
A: Given Information: Annual Demand (D) = 4000 units Holding cost rate per unit = 1.25 € Holding cost…
Q: Describe the purpose of usin ABC analysis in inventory and provide explanation for each category.
A: ABC analysis rferrs to an inventory management system aimining to determine the values of inventory…
Q: Describe the difference between a fixed-quantity (Q) anda fixed-period (P) inventory system.
A: Fixed order quantity assumes possessions and ability to the utmost and permanent. It will not…
Q: Explain the major cost categories used in inventory analysis and their functional relationship to…
A: Goods management entails three essential costs: procurement, transportation, and storage of…
Q: Distinguish between FOB destination and FOB origin. Whatprocedures should the auditor follow…
A: Inventory is of different types of work-in-progress, raw material, finished Goods, repair. The main…
Q: PHL Manufacturing assembles security monitors. It purchases 900 black-and-white cathode ray tubes…
A: Given: Demand= 900 cathode ray per month Unit cost= $80 Ordering cost= $30 Annual carrying cost= 25…
Q: Briefly explain the costs associated with EOQ model. If production cost goes up, what is the impact…
A: Economic order quantity (EOQ): Economic order quantity (EOQ) is the order size that minimizes the…
Q: A retail store dealing in computer hardware imports an enterprise model solid-state drive (SSD) at a…
A: Annual Orders under DOQ = Annual Demand ÷ DOQ Maximum inventory level = ordering quantity…
Q: B). As an inventory manager, you must decide on the order quantity for an item. Its annual demand is…
A: Given data: Quantity Price per Unit 1 - 100 $5.65 101 - 350 $4.95 351 or more $4.55 The…
Q: A certain beverage company provides a complete line of beer, wine, and soft drink products for…
A: Formula for calculating Price relative= Price in 2014Price in 2011(base year)×100 Product…
Q: Gainesville Cigar stocks Cuban cigars that have variable lead times because of the difficulty in…
A: Reorder point: Reorder point is the point that indicates the reorder situation for the inventory.…
Q: . Characterize the following decision as either tactical or strategic: The discounts to offeron…
A: Decentralization in the organization implies the delegation of the power in the lower and…
Q: In a sales rebate contract, a rebate is paid by supplier for any items sold above certain. Select…
A: ANSWER: OPTION (A) IS THE CORRECT ANSWER. REASON: Supplier providing direct incentive for retailer…
Q: Gainesville Cigar stocks Cuban cigars that have variable lead times because of the difficulty in…
A: Given information, LT Lead time 8 SDLT SD of Lead time 2 d Demand 150 SDd SD of demand…
Q: Distinguish between dependent and independent demand in a McDonald’s restaurant, in an integrated…
A: Independent Demand is the demand for complete units or finished products. Independent demand is the…
Q: Discuss why is it not necessary to include product cost in the EQQ model, but the quantity inventory…
A: The concept of organizational structures: Operational manager is responsible for the context of a…
Q: Discuss the assumptions of the basic EOQ model?
A: The Basic EOQ( Economic Order Quantity) Model: Economic order quantity or EOQ model is the equation…
Q: Suppose that the retailer SnowInc buys ski jackets from the Chinese manufacturerJacketCo. Due to the…
A: Formula:
Q: County Hospital orders syringes from a hospital supplyfirm. The hospital expects to use 40,000 per…
A: D = Demand S = Cost per delivery H = Carrying cost for the syringe EOQ = 2DSH TC = Q2*H+DQ*S+P * D
Q: What is the relationship between purchasing and the classical EOQ model?
A: EOQ model of inventory management gives the economic order quantity or the order size which…
Explain two potential issues that may develop when using the trading EOQ model with quantity discount.
Step by step
Solved in 2 steps
- Discuss two potential issues that may develop when using the traditional EOQ model with quantity discount.What is the relationship between purchasing and the classical EOQ model?Distinguish between FOB destination and FOB origin. Whatprocedures should the auditor follow concerning acquisitions of inventory on an FOBorigin basis near year-end?
- Explain why it is not necessary to include product cost {priceor price times qua ntity) in the EOQ model, but the quantitydiscount model requires this information.Company B is a retailer of mobile phones in Australia that works 250 days in a year. The manager would like you to determine a minimum-cost inventory plan for an upcoming mobile phone to be launched in the market. They have collected the following information: • Annual demand: 750 phones • Phone cost: $1,005 each• Phone RRP: $1,149 each• Net weight: 167 g each • Tare weight: 257 g each• Annual inventory holding cost: 27.5%• Cost per order to replenish inventory: $81.71• Annual in-transit holding cost: 10%• Freight rate (per kg): $8.10• Freight-related charges (per shipment): $276.50 (i.e. handling fee, dangerous good fee, and lithium battery fee)• Time to process order for freight: 2 day • Freight transit time: 5 days The manager wants you to determine the following information: a. Economic order quantityb. The total purchasing costc. The total ordering cost d. The total inventory holding coste. The total transportation cost (by weight)f. The total freight-related cost (by shipment) g.…I am planning a Holiday Ornament to commemorate the christmas spirit. Forcasted demand for ornaments is normally distributed with a mean of 40,000 with a standard deviation of 15,000 units. The cost per ornament is $3 and are sold to people around the world for $10 each. All unsold ornaments are donated after the holidays without any text deductions for me. How many ornaments should I tell my supplier to produce? What's my expected profit? If the manufacturer were to discount the price to me to $2.75 if I ordered at least 80,000 units should I do it? Justify the answer with profit estimates. please use excel
- Discuss the major inventory costs that are used in determining EOQ?(a) Complete the invoice itemization by finding the total amount (in $) for each item, the merchandize total (in $), and the total amount of the invoice (in $). Stock # Description Unit Price Amount 4811V Stereo Receivers 50 x $293.50 $ 511CX Blu-Ray Players 25 x $136.28 $ 6146M Home Theater Systems 40 x $656.12 $ 1031A LCD TVs 20 x $594.00 $ Merchandise Total $ Insurance + Shipping $ Invoice Total $ (b) What are the discount date and the net date if the shipment arrived on July 14? Discount Date ---July--- Net Date ---August___ (c)While in transit, five Blu-ray players and four LCD TVs were damaged and will be returned. What is the amount (in $) of the returned merchandise? What is the revised merchandise total (in $)? Returned merchandise$ Revised merchandise total$ (d)What are the amount (in $) of the cash discount and the net amount due if the discount is taken? (Round your answers to the nearest cent.) cash discount$ Net…Explain two problems that may arise when using standard EOQ model when quantity discounts are allowed.
- ABC INVENTORY CLASSIFICATION A company trades with a number of items and the management is interested in classifying the items contained in the warehouse according to the order of importance, by the capital retained in the warehouse.the items contained in the warehouse according to the order of importance, by the capital retained in the warehouse.The following is a list of the items the company deals with and their respective demand and cost.demand and cost. c) Will you be able to decide with the classification tool which of the items can no longer be marketed by the company?Explain the difference between a fixed-quantity and a fixed-period inventory system?Sam is at the post office to mail a package. After he pays for mailing the package, the clerk asks if he would like to buy some stamps. Sam pauses to think before he answers. He doesnt have a credit card with him. After paying for the package, he has about $30 in his pocket. Analyze this from an inventory standpoint. Identify the relevant considerations.