Carrefour estimates an annual demand of a grocery product at 4800 kgs. It costs RO 100 to make and receive an order, and it takes 15 workdays to receive it. The annual holding cost is 15% of purchase price. The price RO 2 per kg. The company is operating 6 workdays per week in a 52-weel year. At what level of inventory in Kgs should the company be placing orders? Round-up to the nearest integer a. 188 O b. 277 O c. 247 O d. 231 e. None is correct

Carrefour estimates an annual demand of a grocery product at 4800 kgs. It costs RO 100 to make and receive an order, and it takes 15 workdays to receive it. The annual holding cost is 15% of purchase price. The price RO 2 per kg. The company is operating 6 workdays per week in a 52-weel year. At what level of inventory in Kgs should the company be placing orders? Round-up to the nearest integer a. 188 O b. 277 O c. 247 O d. 231 e. None is correct

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 21P

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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?
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Carrefour estimates an annual demand of a grocery product at 4800 kgs. It costs RO 100 to make and receive an order, and it takes 10 workdays to receive it. The annual holding cost is 15% of purchase price. The price RO 2 per kg. The company is operating 6 workdays per week in a 52-week year. At what level of inventory in Kgs should the company be placing orders? Round-up to the nearest integer O a. 247 O b. 154 O c. None is correct O d. 277 O e. 188
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