Q4. Annual cost of carrying a unit Tk 15 And ordering costs per order Tk 500 Time Required for delivery 3 to 6 weeks Weeks consumption: Maximum consumption 1800 Units Normal Consumption 1100 Units Minimum Consumption 700 Units Lead time for emergency purchase 2 weeks, Total working 52 weeks Required: (i)Re-order Level (ii) Maximum stock Level (iii)Minimum stock level (iv) Average stock level (v) Danger level

Q4. Annual cost of carrying a unit Tk 15 And ordering costs per order Tk 500 Time Required for delivery 3 to 6 weeks Weeks consumption: Maximum consumption 1800 Units Normal Consumption 1100 Units Minimum Consumption 700 Units Lead time for emergency purchase 2 weeks, Total working 52 weeks Required: (i)Re-order Level (ii) Maximum stock Level (iii)Minimum stock level (iv) Average stock level (v) Danger level

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 2CE: Sterling Corporation has an EOQ of 5,000 units. The company uses an average of 500 units per day. An...

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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.
Sterling Corporation has an EOQ of 5,000 units. The company uses an average of 500 units per day. An order to replenish the part requires a lead time of five days. Required: 1. Calculate the reorder point, using Equation 20.3. 2. Graphically display the reorder point, where the vertical axis is inventory (units) and the horizontal axis is time (days). Show two replenishments, beginning at time zero with the economic order quantity in inventory. 3. What if the average usage per day of the part is 500 units but a daily maximum usage of 575 units is possible? What is the reorder point when this demand uncertainty exists?
Refer to Cornerstone Exercises 2.2 and 2.3. Next year, Pietro expects to produce 50,000 units and sell 49,300 units at a price of 12.50 each. Beginning inventory of finished goods is 42,500, and ending inventory of finished goods is expected to be 34,000. Total selling expense is projected at 26,000, and total administrative expense is projected at 134,000. Required: 1. Prepare an income statement in good form. Be sure to include the percent of sales column. 2. What if the cost of goods sold percentage for the past few years was 65 percent? Explain how management might react.
Given the following informations annual sales in units 30,000 cost of placing an order $60,00 per unit carrying costs $ 1.50 Existing units of safety stock 300 a what is the EOQ? b. what is the average inventory based on the EOQ and the existing safety stock c. what is the maximum level of inventory? d. how many orders are placed each year?
Octopus Company provides you with the following information regarding its inventory: Maximum lead time 5 weeks Minimum lead time 2 weeks Normal lead time 3 weeks Normal weekly usage 4 000 units Interest rate 5% Cost price per unit R20 per unit Inventory carrying cost R7 per unit Ordering cost R30 per order Maximum weekly usage 4 000 units Minimum weekly usage 3 000 units Required: a).Calculate EOQ b). safety stock c). total ordering cost
From the following information you are required to calculate for each product : Re order level Maximum stock Minimum Stock Average Stock Product X Product Y Average consumption per week 500 500 Minimum requirement per week 250 250 Maximum usage per week 750 750 EOQ 3,000 5,000 Replacement time 4 to 6 weeks 2 to 4 weeks
The following inventory date have been established for Warriors Company: Order must be placed in multiples of 100 Annual sales are 338,000 units The purchase price per unit is P6 Carrying cost is 20% of the purchase price of the goods Fixed order costs is P48 Three days are required for delivery. What is the EOQ? How many orders should Warriors placed each year? How many units must be order every time? Calculate the total cost of ordering and carrying cost if the order quantity is 4,000 units 4,800 units 6,000 units At EOQ Thank you so much!
•The material DX is used uniformly throughout the year. The data about annual requirement, ordering cost and holding cost of this material is given below: • Annual requirement: 3,400 units • Ordering cost: OMR 15 per order • Holding cost: OMR 0.70 per unit •What will be the economic order quantity (EOQ) of material DX a. 3817.254 b. 318.72 c. 381.72 d. 3187.254 ....... Answer the Question based the data given below Opening Stock 25000 Closing Stock 35000 Net purchases 130000 Manufacturing expenses 30000 What will be the inventory turnover ratio? a. 6 b. 5 c. 4.5 d. 4
Octopus Company provides you with the following information regarding its inventory: Maximum lead time 5 weeks Minimum lead time 2 weeks Normal lead time 3 weeks Normal weekly usage 4 000 units Interest rate 5% Cost price per unit R20 per unit Inventory carrying cost R7 per unit Ordering cost R30 per order Maximum weekly usage 4 000 units Minimum weekly usage 3 000 units Required: Calculate Reorder point 20 000 15 249 21 000 22 000 None of the above
ABC Co. is planning to stock a new product. The Co. Has developed thefollowing information:Annual usage = 5400 unitsCost of the product = 365 MU/unitOrdering cost = 55 MU/orderCarrying cost = 28% /year of inventory value held.a Determine the optimal number of units per orderb. Find the optimal number of orders/yearc. Find the annual total inventory cost Please mention formulas and do it in detail so I can understand.
Octopus Company provides you with the following information regarding its inventory: Maximum lead time 5 weeks Minimum lead time 2 weeks Normal lead time 3 weeks Normal weekly usage 4 000 units Interest rate 5% Cost price per unit R20 per unit Inventory carrying cost R7 per unit Ordering cost R30 per order Maximum weekly usage 4 000 units Minimum weekly usage 3 000 units Required: Calculate Number of orders per year 166.53 times 1700 times 155.63 times 167.53 times None of the above
A company has 52 week per year operation. The weekly demand is for product it needs is 20 units and it costs OMR 2500 per unit to purchasedThe cost of reordering is OMR 50 each order. The annual holding cost is OMR 500 per unitWhich economic order quantity policy, either round-up or round down for inventory ordering to be used here to minimize total inventory cost per year? The corresponding order quantity will be: a. None is correct B. 15 C. 13 d. 12 e. 14