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A Data Table Annual demand for denim cloth 40,700 yards Ordering cost per purchase order $185 Carrying cost per year 10% of purchase costs Safety-stock requirements None Cost of denim cloth $11 per yard The purchasing lead time is 2 weeks. The Fabric World is open 220 days a year (44 weeks for 5 days a week). Print Done

A Data Table Annual demand for denim cloth 40,700 yards Ordering cost per purchase order $185 Carrying cost per year 10% of purchase costs Safety-stock requirements None Cost of denim cloth $11 per yard The purchasing lead time is 2 weeks. The Fabric World is open 220 days a year (44 weeks for 5 days a week). Print Done

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Data Table Annual demand for denim cloth 40,700 yards Ordering cost per purchase order $185 Carrying cost per year 10% of purchase costs Safety-stock requirements None Cost of denim cloth $11 per yard The purchasing lead time is 2 weeks. The Fabric World is open 220 days a year (44 weeks for 5 days a week). Print Done
Transcribed Image Text:Data Table Annual demand for denim cloth 40,700 yards Ordering cost per purchase order $185 Carrying cost per year 10% of purchase costs Safety-stock requirements None Cost of denim cloth $11 per yard The purchasing lead time is 2 weeks. The Fabric World is open 220 days a year (44 weeks for 5 days a week). Print Done
The Fabric World sells fabrics to a wide range of industrial and consumer users. One of the products it carries is denim cloth, used in the manufacture of jeans and carrying bags. Th supplier for the denim cloth pays all incoming freight. No incoming inspection of the denim is necessary because the supplier has a track record of delivering high-quality merchandise. The purchasing officer of the Fabric World has collected the following information: (Click the icon to view the information.) Read the requirements. Requirement 1. Calculate the EOQ for denim cloth. Begin by selecting the formula used to calculate EOQ. (D = Demand in units for one year, P = Ordering cost per purchase order, C = Carrying cost of one unit in stock, Q = Any order quantity.) %3D (Round the denominator to the nearest cent.) The EOQ for denim cloth is | yards. Requirement 2. Calculate the number of orders that will be placed each year. Determine the formula used to calculate the number of orders that will be placed each year, then calculate the orders per year. Number of orders orders per year %D Requirement 3. Calculate the reorder point for denim cloth. Determine the formula used to calculate the reorder point for denim cloth, then calculate the reorder point. Reorder point %3D yards Choose from any list or enter any number in the input fields and then continue to the next question.
Transcribed Image Text:The Fabric World sells fabrics to a wide range of industrial and consumer users. One of the products it carries is denim cloth, used in the manufacture of jeans and carrying bags. Th supplier for the denim cloth pays all incoming freight. No incoming inspection of the denim is necessary because the supplier has a track record of delivering high-quality merchandise. The purchasing officer of the Fabric World has collected the following information: (Click the icon to view the information.) Read the requirements. Requirement 1. Calculate the EOQ for denim cloth. Begin by selecting the formula used to calculate EOQ. (D = Demand in units for one year, P = Ordering cost per purchase order, C = Carrying cost of one unit in stock, Q = Any order quantity.) %3D (Round the denominator to the nearest cent.) The EOQ for denim cloth is | yards. Requirement 2. Calculate the number of orders that will be placed each year. Determine the formula used to calculate the number of orders that will be placed each year, then calculate the orders per year. Number of orders orders per year %D Requirement 3. Calculate the reorder point for denim cloth. Determine the formula used to calculate the reorder point for denim cloth, then calculate the reorder point. Reorder point %3D yards Choose from any list or enter any number in the input fields and then continue to the next question.
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