Problem 11-19 (Algo)The annual demand for a product is 15,000 units. The weekly demand is 288 units with a standard deviation of 80 units. The cost toplace an order is $32.00, and the time from ordering to receipt is six weeks. The annual inventory carrying cost is $0.10 per unit.a. Find the reorder point necessary to provide a 90 percent service probability.Note: Use Excel's NORM.S.INV() function to find the z value. Round z value to 2 decimal places.Reorder pointunitsb. Suppose the production manager is asked to reduce the safety stock of this item by 45 percent. If she does so, what will the newservice probability be?Note: Use Excel's NORM.S.DIST() function to find the correct probability for your computed z value. Round "z" value to 2decimal places and final answer to 1 decimal place.Service probability%

Step 1:Given:D: Annual demand for the product = 15,000 unitsd: Weekly demand = 288 unitsσ: Standard…

Answered: Problem 11-19 (Algo) The annual demand…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 19P

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Refer to Cornerstone Exercise 3.4 for data on Dohini Manufacturing Companys purchasing cost and number of purchase orders. The controller for Dohini Manufacturing ran regression on the data, and the coefficients shown by the regression program are: Required: 1. Construct the cost formula for the purchasing activity showing the fixed cost and the variable rate. 2. If Dohini Manufacturing Company estimates that next month will have 430 purchase orders, what is the total estimated purchasing cost for that month? (Round your answer to the nearest dollar.) 3. What if Dohini Manufacturing wants to estimate purchasing cost for the coming year and expects 5,340 purchase orders? What will estimated total purchasing cost be? (Round your answer to the nearest dollar.) What is the total fixed purchasing cost? Why doesnt it equal the fixed cost calculated in Requirement 1?
can you help me figure out the answer to a.
can you help me answer A.
Problem 1:A. Your firm uses a fixed order quantity system and operates 52 weeks per year. One of the items handled has the following characteristicsAnnual Demand = 20,000 unitsOrder Cost = $ 40 per orderHolding Cost = $ 2 per unit per yearLead time = 2 weeksDemand is normally distributed with a standard deviation of weekly demand of 100 units.a) Calculate the itemâ€™s EOQ. What is the average time between orders (in weeks)b) Find the safety stock and reorder point that provide a 95% customer service levelB. The University Bookstore at a prestigious private university buys mechanical pencils from a wholesaler. The wholesaler. The wholesaler offers discounts for large according to the following price schedule:Order Quantity Price per Unit0 â€“ 200 $ 4.00201 â€“ 2,000 $ 3.502,001 or more $ 3.25Problem 2:A. A textile manufacturer wants to set up a control chart for irregularities (.e.g. oil stains, shop soil, loose threads, and tears) per 100…
QUESTION 1 Suppose that the demand rate is 500 units per week. The fixed ordering cost is $50 per order. The unit inventory cost is 20% of the product cost. The cost of the product depends on the quantity ordered. It is $0.05 when you order less than 2300 units, $0.048 when you order between 2301 and 5000 units and $0.045 when you order more than 5000 units. What is your optimal order quantity if you intend to limit the number of units to at or below 2300 units? O 2136 O 2236 O 2300 O None of the above
PLEASE DO PART B Harper Enterprises has an average annual demand of 45,000 units for its main product line. The cost of setting up for one production run of its product is $520 and the cost of carrying one unit in inventory for one year is $7.49. Required: Use the economic-order-quantity model to determine the optimal order size. The answer to part a is 2,500 Calculate the TARC(Total annual relevent cost) for the EOQ calculated in part a. What is the answer to Part B?
Diagnostic Supplies has expected sales of 98,000 units per year, carrying costs of $5 per unit, and an ordering cost of $8 per order. a. What is the economic ordering quantity? Economic ordering quantity b-1. What is the average inventory? Average inventory b-2. What is the total carrying cost? Total carrying cost units units
multiple choice Luster Corporation presents the following data: Usage is 400 units per month, cost per order is P20, and carrying cost per unit is P6. Given these data, answer the following questions: (A) What is the economic order quantity? (B) How many orders are required each month? A. (A) 32 and (B) 6B. (A) 32 and (B) 8C. (A) 52 and (B) 6D. (A) 52 and (B) 8E. (A) 62 and (B) 10
Solution method please.
Domestic
6. Carrying Costs vs. Ordering Costs Based on an EOQ analysis, the optimal order quantity is 4,000 units. Annual inventory carrying costs equal 30% of the average inventory level. The company pays P 10 per unit to buy the product and P 400 to place an order. The monthly demand for the product is 5,000 units. REQUIRED: Determine the following: A) Annual inventory carrying costs. B) Annual inventory ordering costs. C) Total inventory costs.
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