A company has an annual demand for 2,400 units of inventory. The cost of placing an order is $100 each time, and the cost to store each item of inventory is $3 per year. Calculate the optimal order quantity.
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- Sterling Corporation has an EOQ of 5,000 units. The company uses an average of 500 units per day. An order to replenish the part requires a lead time of five days. Required: 1. Calculate the reorder point, using Equation 20.3. 2. Graphically display the reorder point, where the vertical axis is inventory (units) and the horizontal axis is time (days). Show two replenishments, beginning at time zero with the economic order quantity in inventory. 3. What if the average usage per day of the part is 500 units but a daily maximum usage of 575 units is possible? What is the reorder point when this demand uncertainty exists?Pietro expects to produce 50,000 units and sell 49,300 units. Beginning inventory of finished goods is 42,500, and ending inventory of finished goods is expected to be 34,000. Required: 1. Prepare a statement of cost of goods sold in good form. 2. What if the beginning inventory of finished goods decreased by 5,000? What would be the effect on the cost of goods sold?Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the economic order quantity. 2. Compute the ordering, carrying, and total costs for the EOQ. 3. How much money does using the EOQ policy save the company over the policy of purchasing 4,000 plastic housing units per order?
- A company wishes to establish an EOQ for an item for which the annual demandis $800,000, the ordering cost is $32, and the cost of carrying inventory is 20%.Calculate the following:a. The EOQ in dollars.b. Number of orders per year.c. Cost of ordering, cost of carrying inventory, and total cost.d. How do the costs of carrying inventory compare with the costs of ordering?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.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?
- 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?Nowlin Pipe & Steel has projected sales of 19,600 pipes this year, an ordering cost of $5 per order, and carrying costs of $1.60 per pipe. a. What is the economic ordering quantity? Economic ordering quantity b. How many orders will be placed during the year? Number of orders orders c. What will the average inventory be? Average inventory units unitsRainbow Toys orders inventory that costs $50 per unit. The annual holding cost is 20% of unit cost, and ordering cost is $100 per order. Annual demand is 1,200 units. Calculate the Economic Order Quantity.
- Diagnostic Supplies has expected sales of 98,000 units per year, carrying costs of $5 per unit, and an ordering cost of $8 per order. a. What is the economic ordering quantity? Economic ordering quantity b-1. What is the average inventory? Average inventory b-2. What is the total carrying cost? Total carrying cost units unitsNowlin Pipe & Steel has projected sales of 6,400 pipes this year, an ordering cost of $5 per order, and carrying costs of $1.60 per pipe.a. What is the economic ordering quantity? b. How many orders will be placed during the year? c. What will the average inventory be?General
