DETERMINING INVENTORY MODELS FSYHILD is a manufacturing company of made to order face shield. It is producing products at a constant rate with a requirement of 5,500 face shields per quarter throughout the year.  If ordering costs are P35.00 per order, unit cost is P10.00 per face shield, and annual inventory holding cost are charged at 30% of the units cost. 1. Assuming a lead time of 5 days, what is the reorder point? 2.  What is the total cost if the management decides to increase the demand by 75%?

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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DETERMINING INVENTORY MODELS

FSYHILD is a manufacturing company of made to order face shield. It is producing products at a constant rate with a requirement of 5,500 face shields per quarter throughout the year.  If ordering costs are P35.00 per order, unit cost is P10.00 per face shield, and annual inventory holding cost are charged at 30% of the units cost.

1. Assuming a lead time of 5 days, what is the reorder point?

2.  What is the total cost if the management decides to increase the demand by 75%?

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