Read the problem and answer the questions worksheet 1. There are 1,000 iron bars in stock, and 1,500 are due in form orders that were placed previously. The company sells iron bars at the rate of 100 per day and observed that it takes an average pf 20 days for an order to be received. Because usage and lead times are known with certainty and because the company has determined that an order must be placed now, the desired safety stock quantity must be equal to ufoctures PSP. One of its is PSP 5. Expected demand
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- Give typing answer with explanation and conclusion Brookes, Inc. expects to sell 700 of its designer suits every week. The store is open seven days a week and expects to sell the same number of suits every day. The company has an economic order quantity (EOQ) of 500 suits and a safety stock of 100 suits. Once an order is placed, it takes three days for Brookes to get the suits in. How many orders does the company place per year? Assume that it is Monday morning before the store opens, and a shipment of suits has just arrived. When will Brookes place its next order?Oster Company Ltd. manufactures dusk to dawn lamps. The following are the details of their operation during 2021: Average monthly market demand 2,000 lamps Ordering costs $ 200 per order Inventory carrying costs 20% per annum Cost of lamps $ 1000 per lamp Normal usage 100 lamps per week Minimum usage 50 lamps per week Maximum usage 200 lamps per week Lead time to supply 4 - 6 weeks Compute: Economic order quantity. Maximum level of stock. Minimum level of stock. Re-order level of stock. What tradeoffs in costs are involved in computing the Economic Order Quantity?On January 1, Sweet Pleasures, Inc., begins business. The company has 14,000 cash on hand and is attempting to project cash receipts and disbursements through April 30. On May 1, a note payable of 10,000 will be due. This amount was borrowed on January 1 to carry the company through its first four months of operation. The unit purchase cost of the companys single product, a box of Sweet Pleasures chocolates, is 12. The unit sales price is 28. Projected purchases and sales in units for the first four months are: Sales terms call for a 5% discount if paid within the same month that the sale occurred. It is expected that 50% of the billings will be collected within the discount period, 25% by the end of the month after purchase, 19% in the following month, and 6% will be uncollectible. Approximately 60% of the purchases are paid for in the month purchased. The rest are due and payable in the next month. Total fixed marketing and administrative expenses for each month include cash expenses of 5,000 and depreciation on equipment of 2,000. Variable marketing and administrative expenses total 6 per unit sold. All marketing and administrative expenses are paid as incurred. REQUIREMENT You have been asked to prepare a cash budget for the next four months to see if the loan can be repaid. Review the worksheet CASHBUD that follows these requirements. The problem data have already been entered in the Data Section of the worksheet.
- LYD Corp. receives an order from a new customer, amounting $55,000. LYD Corp. uses 45-day credit terms as a standard. The Variable Cost Ratio is 75.00% of Sales, Collection Expense Ratio 15.00% of Sales and the Interest Rate is 13.00% (365 days per year). Instruction: (show your calculations and round to 2 decimal places) Should the order be accepted? Defend your answer. Please ASAPSandhill Traders is one of the largest RV dealers in Austin, Texas, and sells about 2,800 recreational vehicles a year. The cost of placing an order with Sandhill's supplier is $500, and the inventory carrying costs are $260 for each RV. Management likes to maintain safety stock of 12 RVs. Most of its sales are made in either the spring or the fall. How many orders should the firm place this year? (Round intermediate calculations to 1 decimal place, e.g. 15.5 and final answer to 0 decimal places, e.g. 15.)Midland Company buys tiles and prints different designs on them for souvenir and gift stores. It buys the tiles from a small company in Europe, so at all times it keeps on hand a stock equal to the tiles needed for three months’ sales. The tiles cost $3 each and must be paid for in cash. The company has 28,000 tiles in stock. Sales estimates, based on contracts received, are as follows for the next six months: January 12,400 February 17,800 March 13,200 April 14,200 May 9,600 June 7,200 Required: a. & b. Estimate purchases (in units) and cash required to make purchases in January, February, and March. MIDLAND COMPANY Merchandise Purchases BudgetFor the Period Ended March 31(in units) January February March Units to be purchased ? ? ? Estimated cost ? ? ?
- Dawes Designs buys T-shirts for clubs, teams, and other organizations. Dawes takes the shirts and adds the organization's logo. Because of the uncertainty in the timing of the sales and to avoid stock outages, Dawes tries to maintain an inventory of shirts equal to two-month's of sales. The shirts cost $16.50 each and must be paid for in cash. On June 30 of the current year, the company expects to have 16,600 shirts in stock. Sales estimates, based on contracts received and historical data, are as follows for the next six months: July 8,020 August 10,990 September 8,460 October 9,010 November 6,480 December 5,160 Required: a. & b. Estimate purchases (in units) and cash required to make purchases in July, August, and September. DAWES DESIGNS Merchandise Purchases Budget For the Period Ended March 31 (in units) July August September Units to be purchased ?? ?? ?? Estimated cost $ ?? $ ?? $ ??Dawes Designs buys T-shirts for clubs, teams, and other organizations. Dawes takes the shirts and adds the organization's logo. Because of the uncertainty in the timing of the sales and to avoid stock outages, Dawes tries to maintain an inventory of shirts equal to two-month's of sales. The shirts cost $20.50 each and must be paid for in cash. On June 30 of the current year, the company expects to have 17,000 shirts in stock. Sales estimates, based on contracts received and historical data, are as follows for the next six months: July 8,420 August 11,390 September 8,860 October 9,410 November 6,880 December 5,560 Required: a. & b. Estimate purchases (in units) and cash required to make purchases in July, August, and September.Bulldogs Inc. expects to use 48,000 boxes of chocolate per year costing P12 per box. Inventory carrying cost is equal to 20% of the purchase price. The company uses its inventory at a constant rate. The lead time for placing the order is 3 days, and Bulldogs Co. holds 2,400 boxes of paint as safety stock. If the company orders 2,000 boxes of chocolate per order, what is the cost of carrying inventory? Bulldogs Inc. currently fills mail orders from all over the country and receipts were received in its head office. The company’s average accounts receivable is P3,125,000 and is financed by a bank loan with 10% interest. Bulldogs is considering a regional lockbox system to speed up collections. This system is projected to reduce the average accounts receivable by 15%. The annual cost of the lockbox system is P25,000. What is the estimated net annual savings in implementing the lockbox system?
- The soft goods department of a large department store sells 175 units per month of a certain large bath towel. The unit cost of a towel to the store is $2.50 and the cost of placing an order has been estimated to be $12.00. The store uses an inventory carrying charge of 25% of the acquisition cost per year. Determine: 1.) the optimal order quantity. 2.) The order frequency. 3.) The annual holding and setup cost. 4.) The supplier of the bath towel is offering a discount of $25 off each order if orders are placed in quantities of 500. Should the department store place orders for 500 units?An auto parts supplier sells batteries to car dealers and auto mechanics. The annual demand is approximately 1,200 batteries. The suppliers pays $28 for each battery and estimates that the annual holding cost is $8.40 per year. It costs approximately $20 to place an order. Assume a 250-day working year. a. Compute for the EOQ round off your answer to the nearest whole number. b. Compute for the expected number of orders. Round off your answer to the nearest whole number. c. Compute for the expected time between orders. Round off your answer to the nearest whole number.Morning Glory buys cereal directly from the manufacturer for $20 per case. The company’s annual demand for cereal is 200,000 cases and the company believes that the demand is constant for each of the 250 days per year that it is open for business. Average lead time from the supplier for new orders is a constant 8 days. The purchasing agent at Morning Glory estimates the annual inventory carrying cost is 10% and it costs approximately $40 to prepare, send, and receive an order. Morning Glory discovered if it orders 10,000+ cases each time, it can obtain a $2 price break per case from the supplier. What order quantity should Morning Glory place based on this information?