Which of the following are costs associated with storing and holding inventories? Cost of capital (or cash) tied up in the stocks that we have bought Warehousing/storage/insurance costs Deterioration costs. The more stock held, the higher the chance (and costs) of stocks becoming obsolete, damaged or unsuitable for sale. All of the above

Which of the following are costs associated with storing and holding inventories? Cost of capital (or cash) tied up in the stocks that we have bought Warehousing/storage/insurance costs Deterioration costs. The more stock held, the higher the chance (and costs) of stocks becoming obsolete, damaged or unsuitable for sale. All of the above

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section11.3: Financial Models

Problem 27P

See similar textbooks

Similar questions

Inventory can be very expensive for firms to hold and manage. One measure of how effective a firm is at managing their inventory is the inventory sales ratio (inventory/sales). Assume a firm has quarterly sales of 1 million and inventory is normally distributed with a mean of $500k and a standard deviation of $100k. simulate the expected inventory to sales ratio for 10,000 iterations. What is the expected mean inventory to sales ratio? What is the probability that the inventory sales ratio is less than 0.5?
With a probabilistic model, increasing the service level A. will decrease the level of safety stock level. B. will increase the cost of the inventory holding. C. will have no impact on the cost of the inventory policy. D. will reduce the cost of the inventory holding.
The beginning balance in accounts receivable is $44 000, the ending balance is $42 000, and sales during the period are $129 000. What are cash receipts from customers, assuming no bad debts or discounts allowed?a. $127 000.b. $129 000.c. $131 000.d. $141 000.
Restricted stock is Multiple Choice a special type of stock that is not transferable from the current holder to others until specific conditions are satisfied. a special type of stock that can be converted into corporate bonds after a specific amount of time has elapsed. a special type of stock that is a result of offering an employee stock ownership plan.
The best quantity to order One of the formulas for inventorymanagement says that the average weekly cost of ordering, payingfor, and holding merchandise iswhere q is the quantity you order when things run low (shoes,TVs, brooms, or whatever the item might be); k is the cost ofplacing an order (the same, no matter how often you order); c isthe cost of one item (a constant); m is the number of items soldeach week (a constant); and h is the weekly holding cost per item(a constant that takes into account things such as space, utilities,insurance, and security). Find dA>dq and d2A>dq2.
A small firm uses 3,400 lbs of chemical dye a year. Currently the firm purchases 300 lbs per order and pays $3 per order. The supplier has just announced that orders of 1,000 lbs or more will be filled at a price of $2per lb. The firm incurs a cost of $100 each time it submits an order and assigns an annual holding cost of 17% of the purchase price. If the supplier offered the discount at 1,500 lbs instead of 1,000 lbs, what order size would minimize total cost. What is the total cost at 1500
Vetox sells industrial chemicals. One of their inputs can be purchased in either jugs orbarrels. A jug contains one gallon, while a barrel contains 55 gallons. The price pergallon is the same with either container. Vetox is charged a fixed amount per orderwhether it purchases jugs or barrels. The inventory holding cost per gallon per monthis the same with either jugs or barrels. Vetox chooses an order quantity to minimizeordering and holding costs per year. Would Vetox purchase a greater number of gallonswith each order if it purchased with jugs or with barrels?a. They would order a greater number of gallons with barrels.b. They would order the same number of gallons with either container.c. They would order a greater number of gallons with jugs.d. They might order a greater number of gallons with jugs or with barrels, depending onvarious factors like the demand rate, ordering cost, and holding cost.
You are the president of XYZ Manufacturing company. You have recently learned about the following issue: A month ago, the company’s general manager (GM) told one of the line managers to produce an extra 15,000 units of a product so that there would be inventory in stock for the next time the item is ordered. Last week, the GM scolded the line manager for having 15,000 units of the item in stock. The GM told the line manager that producing excess inventory costs the company money and should never be done. The GM then puts the line manager on a performance plan. This is not the first time you have heard about the GM telling an employee to do one thing only to criticize him or her for doing it later. This employee feels very frustrated by this, but does not want to make a formal complaint because she has seen other employees lose their jobs or get demoted for questioning the GM. Create an outline that proposes a leadership solution to this issue. The outline should address the following:…
You are planning to save for retirement over the next 30 years.To do this, you will invest $800 a month in a stock account and $350 a month in abond account. The return of the stock account is expected to be 11 percent, and thebond account will pay 6 percent. When you retire, you will combine your money intoan account with an 8 percent return. How much can you withdraw each month fromyour account assuming a 25-year withdrawal period?
Suppose you want to have $800,000 for retirement in 35 years. Your account earns 8% interest. How much would you need to deposit in the account each month?
A firm faces a demand of 40,000 units per month for one of its lines of stock. The firm’s cost of holding stock is £2 per unit of average stock per month, and it costs the firm a total of £100 every time it orders and acquires a new shipment of stock. The firm is willing to face stock-outs and the cost of such is £6 per unit of average stock-out per month. Assuming the firm attempts to minimise overall inventory-related costs, how large (approximately) will the firm allow its stock-outs to become before each new stock delivery arrives? A. 782 units B. 577 units C. 904 units D. 981 units * Explain in full detail
John Johnson, one of your classmates, is preepairing to launch an e-commerce company to sell home repair guidebooks, tools and other related material for home repairs. He has just told you that he talked to his grandmother over the weekend and she has greed to lendd her 25000 thousand euros to launch the company. When you askedJohn what arrangements he has made with his grandmother to formalize the loan, he looked puzzled and said "She plans to send me a check in a week or so, she just needs to get them out of her savings account". Do you agree/disagree with John's actions? What would you advise him to do?