EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN: 9781337514835
Author: MOYER
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 18, Problem 20P
a)
Summary Introduction
To calculate: The EOQ.
b)
Summary Introduction
To calculate: The total yearly cost of inventory for the policy.
c)
Summary Introduction
To calculate: The frequency of placing the order.
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Crawford Steel Corp. buys inventory of 40,000 units annually. The purchase price per unit is $3.00 and delivery time takes 2 weeks after the order is placed. The ordering cost is $40 per order. The storing and insurance cost of the inventory per quarter is 20 percent of the purchase price. Based on the sales records, it normally maintains its safety stock of 4,500 units. Order should be placed in 100 units and 50 weeks is in a year. Calculate:
the economic order quantity.
the total cost of holding inventory.
the inventory level should reorder be made.
the number of orders that will be placed annually.
A company starts the year with twenty units of inventory costing $20 each. In January, ten of these units are sold for $40 each. Then, ten new units are bought for $22 each. Shortly thereafter, ten units are sold for $50 each. Then, ten units are bought for $27 each. Finally, near the end of the year, ten units are sold for $60 each.
If a weighted average (periodic) system is in use, the cost of ending inventory is:
If a weighted average (perpetual) system is in use, the cost of ending inventory is:
Sapphire Aerospace operates 52 weeks per year, and its cost of goods sold last year was $6,500,000. The firm carries eight items in inventory: four raw materials, two work-in-process items, and two finished goods. Table shows last year’s average inventory levels for these items, along with their unit values.a. What is the average aggregate inventory value?b. How many weeks of supply does the firm have?c. What was the inventory turnover last year?
Sapphire Aerospace Inventory Items
Category
Part Number
Average InventoryUnits
Value per Unit
Raw materials
RM-1
20000
$1
RM-2
5000
5
RM-3
3000
6
RM-4
1000
8
Work-in-process
WIP-1
6000
10
WIP-2
8000
12
Finished goods
FG-1
1000
65
FG-2
500
88
Chapter 18 Solutions
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Ch. 18 - Prob. 1QTDCh. 18 - Prob. 2QTDCh. 18 - Prob. 3QTDCh. 18 - Prob. 4QTDCh. 18 - Prob. 5QTDCh. 18 - Prob. 6QTDCh. 18 - Prob. 7QTDCh. 18 - Prob. 8QTDCh. 18 - Prob. 9QTDCh. 18 - Prob. 10QTD
Ch. 18 - Prob. 11QTDCh. 18 - Prob. 12QTDCh. 18 - Prob. 13QTDCh. 18 - Prob. 14QTDCh. 18 - Prob. 15QTDCh. 18 - Prob. 16QTDCh. 18 - Prob. 17QTDCh. 18 - Prob. 18QTDCh. 18 - Prob. 19QTDCh. 18 - Prob. 20QTDCh. 18 - Prob. 21QTDCh. 18 - Prob. 22QTDCh. 18 - Prob. 1PCh. 18 - Prob. 2PCh. 18 - Prob. 3PCh. 18 - Prob. 4PCh. 18 - Prob. 5PCh. 18 - Prob. 6PCh. 18 - Prob. 7PCh. 18 - Prob. 8PCh. 18 - Prob. 10PCh. 18 - Prob. 11PCh. 18 - Prob. 12PCh. 18 - Prob. 13PCh. 18 - Prob. 14PCh. 18 - Prob. 15PCh. 18 - Prob. 16PCh. 18 - Prob. 17PCh. 18 - Prob. 18PCh. 18 - Prob. 19PCh. 18 - Prob. 20PCh. 18 - Prob. 21P
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Inventory management; Author: The Finance Storyteller;https://www.youtube.com/watch?v=DZhHSR4_9B4;License: Standard Youtube License