Homework Help is Here – Start Your Trial Now!
Business
Accounting
ollins Corporation is a major manufacturer of food processors. It purchases motors from Campbell Corporation. Annual demand is 104,000 motors per year or 2,000 motors per week. The ordering cost is $100 per order. The annual carrying cost is $20.80 per motor. It currently takes 3 eeks to supply an order to the assembly plant. ead the requirements. equirement 1. What is the optimal number of motors that Collins's managers should order according to the EOQ model? egin selecting the formula used to calculate EOQ. (D= Demand in units for one year, P= Ordering cost per purchase order, C= Carrying cost of one unit in stock, Q= Any order quantity) 2DP The optimal number of motors per order is 1,000 motors. equirement 2. At what point should managers reorder the motors, assuming that both demand and purchase-order lead time are known with certainty? etermine the formula used to calculate the reorder point for reordering motors, then calculate the reorder point. Demand per week Purchasing lead time (wks) Reorder point 2,000 3 6,000 motors equirement 3. Now assume that demand can vary during the 3-week purchase-order lead time. The table shows the probability distribution of various demand levels. If Collins runs out of stock, it would have to rush order the motors at an additional cost of $1 per motor. How much safety ock should the assembly plant hold? How will this affect the reorder point and reorder quantity? he assembly plant should hold motors as safety stock because when this number of motors are held, Demand ne total stockout and carrying costs are the Total Demand for Motors for 3 Weeks Probability of Demand (sums to 1) 3,000 0.05 4,000 0.30 6,000 0.10 6,140 0.50

ollins Corporation is a major manufacturer of food processors. It purchases motors from Campbell Corporation. Annual demand is 104,000 motors per year or 2,000 motors per week. The ordering cost is $100 per order. The annual carrying cost is $20.80 per motor. It currently takes 3 eeks to supply an order to the assembly plant. ead the requirements. equirement 1. What is the optimal number of motors that Collins's managers should order according to the EOQ model? egin selecting the formula used to calculate EOQ. (D= Demand in units for one year, P= Ordering cost per purchase order, C= Carrying cost of one unit in stock, Q= Any order quantity) 2DP The optimal number of motors per order is 1,000 motors. equirement 2. At what point should managers reorder the motors, assuming that both demand and purchase-order lead time are known with certainty? etermine the formula used to calculate the reorder point for reordering motors, then calculate the reorder point. Demand per week Purchasing lead time (wks) Reorder point 2,000 3 6,000 motors equirement 3. Now assume that demand can vary during the 3-week purchase-order lead time. The table shows the probability distribution of various demand levels. If Collins runs out of stock, it would have to rush order the motors at an additional cost of $1 per motor. How much safety ock should the assembly plant hold? How will this affect the reorder point and reorder quantity? he assembly plant should hold motors as safety stock because when this number of motors are held, Demand ne total stockout and carrying costs are the Total Demand for Motors for 3 Weeks Probability of Demand (sums to 1) 3,000 0.05 4,000 0.30 6,000 0.10 6,140 0.50

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter13: The Balanced Scorecard: Strategic-based Control
Section: Chapter Questions
Problem 9E: Computador has a manufacturing plant in Des Moines that has the theoretical capability to produce...
See similar textbooks
icon
Related questions
Question

Hi, can someone answer this please?

 

Collins Corporation is a major manufacturer of food processors. It purchases motors from Campbell Corporation. Annual demand is 104,000 motors per year or 2,000 motors per week. The ordering cost is $100 per order. The annual carrying cost is $20.80 per motor. It currently takes 3 weeks to supply an order to the assembly plant. Read the requirements. ..... Requirement 1. What is the optimal number of motors that Collins's managers should order according to the EOQ model? Begin by selecting the formula used to calculate EOQ. (D = Demand in units for one year, P = Ordering cost per purchase order, C = Carrying cost of one unit in stock, Q = Any order quantity) 2DP EOQ = The optimal number of motors per order is 1,000 motors. Requirement 2. At what point should managers reorder the motors, assuming that both demand and purchase-order lead time are known with certainty? Determine the formula used to calculate the reorder point for reordering motors, then calculate the reorder point. Demand per week Purchasing lead time (wks) Reorder point %3D 2,000 6,000 motors %3D Requirement 3. Now assume that demand can vary during the 3-week purchase-order lead time. The table shows the probability distribution of various demand levels. If Collins runs out of stock, it would have to rush order the motors at an additional cost of $1 per motor. How much safety stock should the assembly plant hold? How will this affect the reorder point and reorder quantity? The assembly plant should hold motors as safety stock because when this number of motors are held, Demand the total stockout and carrying costs are the Total Demand for Motors for 3 Weeks Probability of Demand (sums to 1) 3,000 0.05 4,000 0.30 6,000 0.10 6,140 0.50 6,300 0.05
Transcribed Image Text:Collins Corporation is a major manufacturer of food processors. It purchases motors from Campbell Corporation. Annual demand is 104,000 motors per year or 2,000 motors per week. The ordering cost is $100 per order. The annual carrying cost is $20.80 per motor. It currently takes 3 weeks to supply an order to the assembly plant. Read the requirements. ..... Requirement 1. What is the optimal number of motors that Collins's managers should order according to the EOQ model? Begin by selecting the formula used to calculate EOQ. (D = Demand in units for one year, P = Ordering cost per purchase order, C = Carrying cost of one unit in stock, Q = Any order quantity) 2DP EOQ = The optimal number of motors per order is 1,000 motors. Requirement 2. At what point should managers reorder the motors, assuming that both demand and purchase-order lead time are known with certainty? Determine the formula used to calculate the reorder point for reordering motors, then calculate the reorder point. Demand per week Purchasing lead time (wks) Reorder point %3D 2,000 6,000 motors %3D Requirement 3. Now assume that demand can vary during the 3-week purchase-order lead time. The table shows the probability distribution of various demand levels. If Collins runs out of stock, it would have to rush order the motors at an additional cost of $1 per motor. How much safety stock should the assembly plant hold? How will this affect the reorder point and reorder quantity? The assembly plant should hold motors as safety stock because when this number of motors are held, Demand the total stockout and carrying costs are the Total Demand for Motors for 3 Weeks Probability of Demand (sums to 1) 3,000 0.05 4,000 0.30 6,000 0.10 6,140 0.50 6,300 0.05
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 1 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Marriage
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Essentials of Business Analytics (MindTap Course …
Essentials of Business Analytics (MindTap Course …
Statistics
ISBN:
9781305627734
Author:
Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:
Cengage Learning
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
SEE MORE TEXTBOOKS