Consider an organisation that experienced a stock-out or long customer waiting time for its product. Outline the inventory system it uses for this product. Based on what you have learned, describe ways to avoid possible stock-out or long customer waiting time. TS Kitchen Appliance Company has 10 different stores located in various parts of Singapore. Each store has an average demand of 300 units of waffle machines per month. Each unit costs $20. The shipping cost from the supplier in China is $500 each time. The holding cost per year is 15% for any item in the stock. (i) What is the EOQ for waffle machines? (ii) The supplier provides an all-unit quantity discount with a discount of 3% for orders between 3,500 units and 6,999 units. The discount is more, at 5%, for orders of 7,000 units or more. Solve for the best order quantity for this situation. What is the annual cost?

Consider an organisation that experienced a stock-out or long customer waiting time for its product. Outline the inventory system it uses for this product. Based on what you have learned, describe ways to avoid possible stock-out or long customer waiting time. TS Kitchen Appliance Company has 10 different stores located in various parts of Singapore. Each store has an average demand of 300 units of waffle machines per month. Each unit costs $20. The shipping cost from the supplier in China is $500 each time. The holding cost per year is 15% for any item in the stock. (i) What is the EOQ for waffle machines? (ii) The supplier provides an all-unit quantity discount with a discount of 3% for orders between 3,500 units and 6,999 units. The discount is more, at 5%, for orders of 7,000 units or more. Solve for the best order quantity for this situation. What is the annual cost?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 6E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...

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A Store has annual demand of 29,000 units. The annual carrying cost for a unit is $15.5, and the ordering cost is $400. The supplier routinely charges the store $17 per unit. However, the supplier has offered a discount price of $15.5 per unit if the store will order 8,800 units. A How much should the store order? B.What will be the total annual inventory cost for that order quantity? DA The store should order 8,800 units. OB. The store should order 7,800 units. OC The total annual inventory cost for that order quantity is $420,175.12 DD. The total annual inventory cost for that order quantity is $511,963.12 OE. The total annual inventory cost for that order quantity is $519,018.18 DF. The store should order 1,223.4 units.
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Fruity Co is a distributors of fresh good and vegetables. It currently has 15 warehouses in the US from which it supplies produce to grocery stores. Each warehouse has an average inventory level of 3.88 million $. Due to advances in transportation services and infrastructure, management believes that if they reduce the number of warehouses to 10, they would still be able to provide timely replenishment to the grocery stores. What would be the total inventory in the system in millions of dollars, if inventory was consolidated from the 15 warehouses to only 10 warehouses? (Enter your answer in millions of dollars. E.g. if you get 30.24 million $ simply enter 30.24 without the million$ sign. Round your answer to 2 decimal places.)
Happlia Co. imports household appliances. Each model has many variations and each unit has an identification number. Happlia pays all costs for getting the goods from the port to its central warehouse in Des Moines. After repackaging, the goods are consigned to retailers. A retailer makes a sale, simultaneously buys the appliance from Happlia, and pays the balance due within one week. To alleviate the overstocking of refrigerators at a Minneapolis retailer, some were reshipped to a Kansas City retailer where they were still held in inventory at December 31, 2016. Happlia paid the costs of this reshipment. Happlia uses the specific identification inventory costing method. Required: 1. In regard to the specific identification inventory costing method: a. Describe its key elements. b. Discuss why it is appropriate for Happlia to use this method. 2. a. What general criteria should Happlia use to determine inventory carrying amounts at December 31, 2016? b. Give four examples of costs…
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