In manufacturing its products, a company uses three raw materials A,B and C as follows: Raw Usage Reorder Price Delivery period in weeks Order Minimum materials per unit level quantity per kg. $ level A 10 1 to 2 10,000 5,000 10,000 10 8,000 4,750 B 4 30 3 to 5 6 15 2 to 4 2,000 Weekly production varies from 175 to 225 units, averaging 200. What would you expect the quantities of the following to be? (1) (I1) (III) Minimum stock of A; Maximum stock of B; and Average stock of A;
In manufacturing its products, a company uses three raw materials A,B and C as follows: Raw Usage Reorder Price Delivery period in weeks Order Minimum materials per unit level quantity per kg. $ level A 10 1 to 2 10,000 5,000 10,000 10 8,000 4,750 B 4 30 3 to 5 6 15 2 to 4 2,000 Weekly production varies from 175 to 225 units, averaging 200. What would you expect the quantities of the following to be? (1) (I1) (III) Minimum stock of A; Maximum stock of B; and Average stock of A;
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text:In manufacturing its products, a company uses three raw materials A,B
and C as follows:
Raw
Usage
Reorder Price
Delivery
period in
weeks
Order
level
Minimum
level
materials
per unit
quantity per kg.
$
A
10
1 to 2
10,000
5,000
10,000
10
8,000
4,750
B
4
30
3 to 5
6
15
2 to 4
2,000
Weekly production varies from 175 to 225 units, averaging 200. What
would you expect the quantities of the following to be?
(1)
(II)
(III)
Minimum stock of A;
Maximum stock of B; and
Average stock of A;
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