General Accounting question A toy manufacturer uses approximately32,000 silicon chips annually. The chipsare used at a steady rate during the 240days a year that the plant operates. Theannual holding cost is 60 cents per chip,and the ordering cost is $24.What is the number of workdays in anorder cycle?

Step 1: Define Economic Order QuantityEconomic Order Quantity is an inventory management technique…

Answered: A toy manufacturer uses approximately…

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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A local electronic repair shop uses 15,000 units of mobile batteries each year. It costs RO 30 to place and receive an order. It cost of material is RO 15 per unit and carrying cost is 24% of the cost per unit. Calculate the Economic Order Quantity for the shop, number of orders and total inventory costs.
The Warren W. Fisher Computer Corporation purchases 8,000 transistors each year as components inminicomputers. The unit cost of each transistor is $10, and the cost of carrying one transistor in inventoryfor a year is $3. Ordering cost is $30 per order and finds that deliveries from his supplier generally take 5working days. What are?(a) the optimal order quantity.(b) the expected number of orders placed each year.(c) the expected time between orders? Assume that Fisher operates on a 200-day working year.(d) the reorder point for the transistors.
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A toy manufacturer uses approximately 32,000 silicon chips annually. The chips are used at a steady rate during the 240 days a year that the plant operates. The annual holding cost is 60 cents per chip, and the ordering cost is $24. What is the number of workdays in an order cycle?