4. Annual Demand for a product is constant at 80 000 units. Costs for placing orders, transportation and receiving consignments are fixed at P1 200. Each inventory cycle costs P50 per unit and comes with a holding cost of 6%. Required Determine the number of units that should be ordered to replenish inventory and number of orders per year. (5 marks)

4. Annual Demand for a product is constant at 80 000 units. Costs for placing orders, transportation and receiving consignments are fixed at P1 200. Each inventory cycle costs P50 per unit and comes with a holding cost of 6%. Required Determine the number of units that should be ordered to replenish inventory and number of orders per year. (5 marks)

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...

See similar textbooks

Similar questions

Annual Demand for a product is constant at 80 000 units. Costs for placing orders,transportation and receiving consignments are fixed at P1 200. Each inventory cycle costsP50 per unit and comes with a holding cost of 6%.RequiredDetermine the number of units that should be ordered to replenish inventory and number oforders per year.
The purchase price of an item of inventory is $25 per unit. In each three month period the usage of the item is 20,000 units. The annual holding costs associated with one unit equate to 6% of its purchase price. The cost of placing an order for the item is $20. What is the Economic Order Quantity (EOQ) for the inventory item to the nearest whole unit?
The weekly requirement of a component is 950 units. The order cost is RM85 per order, the holding cost is RM5 per unit per year and the component cost is RM250 per unit. The firm operates 52 weeks per year. i) Calculate the Economic Order Quantity (EOQ). [Hitungkan Kuantiti Pesanan Ekonomi (EOQ).] ii) Calculate annual total inventory cost. [Hitungkan jumlah kos inventori tahunan.)
C E H The ABC Semi Conductor Company purchase 40,000 units of mother board each year at a cost of $30.00 per unit. The ordering cost is $10.00 per order, and the annual holding cost is estimated at 15% of the unit value. 1. What is the EOQ for the ABC? 2. What is the total annual inventory cost for the mother board if it is ordered in economic quantities? 3. How many orders should be placed each year? D Demand 40000 units H Holding Cost S Ordering Cost 4.5 $/unit/yr 10 $/order Case 1 Case 2 Case 3 Case 4 Case 5 Case 6 Case 7 Quantity Average Total Holding Cost Total Ordering Cost Total COST = 100 200 300 400 500 1000 2000
1. Calculate Economic Order Quantity (EOQ), number of orders, annual ordering costs, annual carrying costs and total inventory costs from the following:Annual consumption: 6000 unitsCost of placing one Order: RO 60Carrying cost per unit: RO 22. Find out the EOQ, Annual ordering cost and annual holding cost from the following information. The demand is 19500 units per year, holding cost is RO 4 per unit for a year and ordering cost is RO 25 order. 3. Find out the ordering cost from the following information, Annual demand is 240 units, holding cost RO 4 per unit for a year and EOQ is 60 units.4. If the price of the material is RO 15 per unit and the annual consumption is 4000 units, the interest and store keeping charges are 20% of the value and the cost of placing of an order and receiving the goods is RO 60, how much material should be ordered at one time? 5. Alexander pump LLC uses about 75000 valves per year and the usage is fairly constant at 6250 unitsper month. The valve cost of…
The annual demand for an item is 20,000 units. The cost to process an order is $25 and the annual inventory holding cost is $4 per item per year. Given the following price-quantity breaks for purchasing the item: Quantity Price 1-1,999 $2.50 per unit 2,000 or more $2.40 per unit What is the quantity you will order each time? Please provide detailed calculation of the total cost (including inventory cost and purchasing cost) for each quantity discount scenario.
5. Genesis Company is a wholesaler. It purchases 60.000 units of Product X per month for sale to retailers. The cost of placing an order is P100. The cost of holding one unit of inventory for one year is P4. Note: Kindly input your answer with comma. Example: 10,000 Required: Previously, the company had been purchasing 5,000 units of product X per order: a. What is the ordering cost per year under the previous policy? b. The annual carrying cost? c. How much money does the company save over the policy of purchasing 5,000 units per order using the EOQ policy?
4. If the price of the material is RO 15 per unit and the annual consumption is 4000 units, the interest and store keeping charges are 20% of the value and the cost of placing of an order and receiving the goods is RO 60, how much material should be ordered at one time?
TS Co has daily demand for ball bearings of 40 a day for each of the 250 working days (50 weeks) of the year. The ball bearings are purchased from a local supplier for $2 each. The cost of placing an order is $64 per order, regardless of the size of the order. The inventory holding costs, expressed as a percentage of inventory purchase price, is 25% per annum. What is the economic order quantity?
Please assist with a b and c urgently
Calculate the EOQ for exercise 8 if annual demand is 10,000 units,inventory storage costs average 20 percent, unit price is $50, and orderingcosts are $30.
The Best Furniture company produces a specialty wood furniture product, and has the following information available concerning its inventory items: Ordering costs per purchase order Carrying costs per year P15,000 P300 per unit Annual demand is 20,000 packages per year. The quantity per order equals 1,000 units. What is the total annual ordering and holding costs? P450,000 P25,000 P300,000 P150,000