The Talbot Company uses electrical assemblies to produce an aray of small appliances. One of its high cost / high volume assemblies, the XO-01, has an estimated annual demand of 8,000 units. Talbot estimates the cost to place an order is $50, and the holding cost for each assembly is $20 per year. The company operates 250 days per year. 1. Use the information in the scenario above. What is the economic order quantity for the xo-01?
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- Redleaf company's market research department works on the manufacture and marketing of a winter tire for vehicles. Currently the price is 10$, and the demand is 13000 units. When the price is increased to 15$, the company expects the demand to be 8500 units (assume that price is linearly related to demand.). Company is following a make-to-order policy for their production, meaning that they make production as much as ordered from their dealers. The dealers make orders 3 times a year, on January, May and September. The company has 23 dealers, who do not have any capacity restriction on their orders. Yet, the above information is a country-wise research, and shows the aggregate demand (sum of all dealers' orders) for each price. Regardless of the production amount, the company faces with a 2170$ of administrative cost for production, in addition to 1,3 $ cost of raw materials and labour costs per each units produced. If we define price as a function of demand (P(d)) using the…Weiss Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs are $50,000 for proposal A and $80,000 For proposal B. In addition to the proposed fixed costs from the two vendors, Weiss's management anticipates that they will have to spend $10,000 for installations to be completed. The variable cost is $14.00 for A and $10.00 for B. The revenue generated by each unit is $22.00. a) The break-even point in dollars for the proposal by Vendor A =(round your response to the nearest whole number). b) The break-even point in dollars for the proposal by Vendor B =(round your response to the nearest whole number).Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 15,000 units. Southeastern estimates its annual holding cost for this item to be $25 per unit. The cost to place and process an order from the supplier is $75. The company operates 300 days per year, and the lead time to receive an order from the supplier is 2 working days. a) Find the economic order quantity. b) Find the annual holding costs. c) Find the annual ordering costs. d) What is the reorder point?
- On September 2, 2021, the Malaysian government set a ceiling retail price of RM19.90 for COVID-19 Self-Test Kit, which would take effect on September 5, 2021. Discuss the advantages and disadvantages of the policy.A company produces and sells luxury goods and is able to control the demand for the product by varying the selling price. The relationship between price and demand is found to be: p=10-(42/D^2)+2Dwhere p is the price per unit in million dollars and D is the demand per year. The company is seeking to maximize its profit. The fixed cost is $59 million per year and the variable cost is $25 million per unit. The production capacity is 42 units per year, and the company produces at least 1 unit per month. 1) What is the company’s range of profitable output per year?A company produces and sells luxury goods and is able to control the demand for the product by varying the selling price. The relationship between price and demand is found to be: p=10-(42/D^2)+2Dwhere p is the price per unit in million dollars and D is the demand per year. The company is seeking to maximize its profit. The fixed cost is $59 million per year and the variable cost is $25 million per unit. The production capacity is 42 units per year, and the company produces at least 1 unit per month.a) Derive how to find the number of units that should be produced annually to maximize profit.b) What is the maximum profit per year?c) What is the annual breakeven point?d)What is the company’s range of profitable output per year?
- A toy manufacturing company works on three types of models, each of which could be produced on the same machine. The detailed information is shown in the table below. The company operates 200 days per year, with two 8-hour shifts, and requires a 15% capacity cushion for each machine to allow for preventive maintenance, breakdowns, and other unforeseen circumstances. Currently they have two machines. How many additional machines will be required to fulfill the predicted annual demand? You need to show the details for calculating demand, supply, and the number of machines needed to get full credit. Job Type Model A Model B Model C Demand (units/year) 6000 4000 5000 Process time (hours/unit) .8 .75 .25 Average lot size (unites/lot) 40 100 50 Set time (hours) per lot 1.0 1.5 0.5The Rocky Mountain Publishing Company isconsidering introducing a new morning newspaper inDenver. Its direct competitor charges $0.25 at retailwith $0.05 going to the retailer. For the level of newscoverage the company desires, it determines the fixedcost of editors, reporters, rent, pressroom expenses,and wire-service charges to be $300,000 per month.The variable cost of ink and paper is $0.10 per copy,but advertising revenues of $0.05 per paper will begenerated. To print the morning paper, the publisherhas to purchase a new printing press, which will cost$600,000. The press machine will be depreciatedaccording to a seven-year MACRS class. The pressmachine will be used for 10 years, at which time itssalvage value would be about $100,000. Assume 300issues per year, a 40% tax rate, and a 13% MARR.How many copies per day must be sold to break evenat a retail selling price of $0.25 per paper?ABC Corporation manufactures a certain product that sells for P5,000 each. The company’s maximum production capacity is 360 units per year. At present it is able to produce and sell 280 units a year. The cost to manufacture each product is P2,400 and the fixed operating cost per year is P520,000.1. What is the break – even sales volume of the product per year?2. What is the profit per year based on the present production – sales status?3. What is the loss if only 150 units were produced and sold in a year?
- The manager of a sole distributorship for a famous brand of automobiles was discussingwith the assistant manager the planned introduction by mid-year of a new model, theXP-60. It was decided earlier that the price be set at P400,000, at which level the totalnumber of units sold was estimated at 500 units annually. The assistant manager hassuggested that the price should be set at a somewhat lower level, say, at P360,000 inorder to attract a major segment of the non-targeted market. At this lower price, 1,000units are expected to be sold.1. Formulate the firm’s linear demand equation for the product given the estimates andprojections made.2. What is the (point) price elasticity of demand at price P400,000? At P360,000?3. What is the midpoint arc price elasticity of demand between these two prices?Interpret the result.4. Determine the total revenue (TR) function and the marginal revenue (MR) function.5. Calculate marginal revenue at the originally proposed price and at therecommended…The A-1 Corporation supplies airplane manufacturers with preformed sheet metal panels that are used on the exterior of aircraft. Manufacturing these panels requires only five sheet metal–forming machines, which cost $500 each, and workers. These workers can be hired on an as-needed basis in the labor market at $9,000 each. Given the simplicity of the manufacturing process, the preformed sheet metal panel market is highly competitive. Therefore, the market price for one of A-1’s panels is $80. Based on the production data in the accompanying table, how many workers should A-1 hire to maximize its profits?A firm has an annual demand of S units for a good whose purchase cost is £c per unit. Each order costs £a to place, and the cost of holding stock is b% of the average value of stock per annum. Determine the optimal order quantity. A local firm uses 2000 units of a particular component each year. The component has a purchase price of £4/unit, while the cost of holding stock is estimated at 20% of the average stock value. If the cost of placing each order is £12.50, find the optimal number of orders placed each year. Suppose the component supplier offers a discount of 2% on the purchase price if orders are placed in units of 1000. Is the discount worth accepting? Suppose that instead of a single figure you had been given a probability distribution for the number of units used each year. Indicate the effect on stock policy.. Please explain fully , the last part is also important to solve.