The Talbot Company uses electrical assemblies to produce an array of small appliances. One ofits high cost/high volume assemblies, the XO-01, has an estimated annual demand of 8,000units. Talbot estimates the cost to place an order is $50, and the holding cost for each assembly is$20 per year. The company operates 250 days per year.14) What is the economic order quantity for the XO-01?A) less than or equal to 100 unitsB) greater than 100 units but less than or equal to 180 unitsC) greater than 180 units but less than or equal to 250 unitsD) greater than 250 units15) What is the annual inventory holding cost if Talbot orders using the EOQ quantity?A) less than or equal to $1,500B) greater than $1,500 but less than or equal to $4,000C) greater than $4,000 but less than or equal to $6,500D) greater than $6,500

Approach to solving the question: Detailed explanation:14.) To find the Economic Order Quantity…

Answered: The Talbot Company uses electrical…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Phillips Corporation is a major manufacturer of food processors. It purchases motors from Viking Corporation. Annual demand is 52,000 motors per year or 1,000 motors per week. The ordering cost is $360 per order. The annual carrying cost is $6.50 per motor. It currently takes 2 weeks to supply an order to the assembly plant. Read the requirements. Requirement 1. What is the optimal number of motors that Phillips's managers should order according to the EOQ model? Begin by selecting the formula used to calculate EOQ. (D = Demand in unit EOQ= 2DP с The optimal number of motors per order is motors. Requirements 1. What is the optimal number of motors that Phillips' managers should order according to the EOQ model? 2. At what point should managers reorder the motors, assuming that both demand and purchase-order lead time are known with certainty? 3. Now assume that demand can vary during the 2-week purchase-order lead time. The following table shows the probability distribution of various…
Wood County Hospital consumes 1,500 boxes of bandages per week. The price of bandages is $36 per box, and the hospital operates 52 weeks per year. The cost of processing an order is $15, and the cost of holding one box for a year is 20 percent of the value of the material. a. The hospital orders bandages in lot sizes of 900 boxes. What extra cost does the hospital incur, which it could save by using the EOQ method? $ 435.37 (Enter your response rounded to two decimal places.) b. Demand is normally distributed, with a standard deviation of weekly demand of 150 boxes. The lead time is 2 weeks. Refer to the standard normal table for z-values. What safety stock is necessary if the hospital uses a continuous review system and a 95 percent cycle-service level is desired? 348 boxes. (Enter your response rounded to the nearest whole number.) What should be the reorder point? boxes. (Enter your response rounded to the nearest whole number.) pm oints
Yen Inc. uses one raw material type in its manufacturing process. It needs 3,750 kilos of this material each month. It incurs P500 each time when making and receiving orders. Annual carrying cost per unit costs P15 in warehousing and P5 in financing costs. If Zen purchases 1,000 kilograms each time, how much lower would the annual cost be if Zen would now follow the EOQ model?
The demand for a particular part called SKU 005 is 1,500 units a year. The cost of one SKU 005 is $64.00. It costs $60.00 to place an order SKU 005, and the user of SKU 005 has a per year inventory carrying cost of 25% of unit cost. Assume that there are 250 working days in the year where SKU 005 is used. Once the purchasing manager for SKU 005 places an order, it always takes the vendor 5 working days to deliver that order. What should the purchasing manager’s reorder point be? ) A. 12 ОВ. 30 Ос. 36 O D. 24 O E. 5
Abey Kuruvilla, of Parkside Plumbing, uses 1,250 of a certain spare part that costs $26 for each order, with an annual holding cost of $27. a) Calculate the total cost for order sizes of 25, 40, 50, 60, and 100 (round your responses to two decimal places). b) What is the economic order quantity? units (round your response to two decimal places).
If annual demand is 12,000 units, annual holding cost is $15 per unit, and setup cost per order is $25, what is the EOQ lot size?
Which of the following is one of the assumptions of EOQ model? Group of answer choices Annual demand is known and even throughout the year Orders are received partially There are quantity discounts Multiple items are involved Lead time varies
The purpose of computing for EOQ is to put into balance the Carrying Cost and Ordering Cost. Is it True or False?
Cape Fear Hospital consumed 400 boxes of bandages per week last year. The price of bandages was $80 per box, and the hospital operates 52 weeks per year. The cost of processing an order was $64, and the cost of holding one box throughout a full year was 20% of the value of the material. What is the EOQ? 407 boxes 102 boxes O 408 boxes O 57 boxes

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