Ahmad Enterprise requires 40,000 gallons of material annually, the cost of placing an order is RM40;the annual carrying cost per gallon is RM3.Required:(a) Determine the EOQ from potential order size of 300, 400, 500, 600, 700 and 800 gallons byconstructing a table. (Refer to the sample given)OrdersizeNumber ofordersTotal ordercosts (RM)2AverageInventory(b) Use the EOQ formula to verify your answer to part (a)Total carryingcost ($)Total order &carrying cost(RM)2/5

The objective of the question is to determine the Economic Order Quantity (EOQ) for Ahmad…

Answered: Ahmad Enterprise requires 40,000…

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 company requires 50 items are required every day for a machine. OMR50 per order incurred for placing an order. The inventory carrying cost per item amounts to OMR0.200 per day. The reorder period is 32 days. Compute reorder level a 1.800 items b. 1.200 items 1.400 items d 1.600 items
Help solve all questions AXY LTD company is planning to use the economic order quantity model to determine the optimal order levels of raw materials. Material Z is consumed evenly over the year and the current usage is 120,000 units of a particular item in the year ahead. The item is purchased in boxes and each box containing 12 units of the material Z, at a price of RM252 per box. A safety inventory of 250 boxes is kept. The cost of placing and handling orders is estimated to be RM6,300, which is based cost incurred for similar orders that have already made. The cost of RM6,300 was for 30 orders. The inflation of 2 per cent should be added to the above ordering costs. Besides, the company estimates to be charged the transporation cost of RM15 per order. It should be assumed that ordering costs change in proportion to the number of orders place. Other costs which relate to material Z such as insurance, interest and space costs for a year, were calculated at 15 % of the purchase price.…
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You are in charge of inventory control of a highly successfulproduct retailed by your firm. Weekly demand for this itemvaries, with an average of 200 units and a standard devia-tion of 16 units. It is purchased from a wholesaler at a cost of$12.50 per unit. You are using a continuous review system tocontrol this inventory. The supply lead time is 4 weeks. Plac-ing an order costs $50, and the inventory carrying rate peryear is 20 percent of the item’s cost. Your firm operates 5 daysper week, 50 weeks per year.a. What is the optimal ordering quantity for this item?b. How many units of the item should be maintained assafety stock for 99 percent protection against stockoutsduring an order cycle?c. If supply lead time can be reduced to 2 weeks, what is thepercent reduction in the number of units maintained assafety stock for the same 99 percent stockout protection?d. If through appropriate sales promotions, the demand variabil-ity is reduced so that the standard deviation of weekly demandis…
Dohini Manufacturing Company had the following 12 months of data on purchasing cost andnumber of purchase orders. Month Purchasing Cost Number of Purchase OrdersJanuary $18,860 370February 18,065 330March 19,250 370April 18,050 410May 19,345 400June 19,500 450July 19,670 460August 20,940 560September 19,430 440October 20,020 500November 18,800 470December 19,340…
Tony uses EOQ logic to determine the order quantity for its various components and is planning its orders. The Annual consumption is 80,000 units, Cost to place one order is P1,200, Cost per unit is P 50 and carrying cost is 6% of Unit cost. Find EOQ, No. of order per year, Ordering Cost and Carrying Cost and Total Cost . Prepare a table of validation.
Entity A's monthly inventory requirement is 300 units. The ordering cost are P50 per order while the annual cost are expected to be P1.00 per unit. Requirement: 1. Compute the Economic Order Quantity. 2. Prepare the table which the entity can procure inventories in several lots as follows : 3,600 units; 1,800 units, 600 units and 360 units. Use this table Order Size Number of Total Cost to Average Total Cost to Total Cost to Orders Order Inventory Carry Order and Total Cost to Carry
Oo.8. Subject :- Account
I do not understand the desired ending inventory in exercise 11. I cannot figure the calculations to get that number.
The following information is derived from Fun & Game LLC financial statements. Annual usage of material is 1,000 units, average stock level is 1,400 units, re-order period is 6 – 10 weeks, minimum level is 800 units and normal rate of consumption is 150 units per week. Then calculate the re-order quantity. a. 800 units b. 1,200 units c. 1,000 units d. 400 units
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