I'm waiting for Answer You purchase lubricating oil in 55-gallon drums and consume anaverage of 642 drums per year.Preparing an order and receiving ashipment of lubricant costs $7 perorder. Annual carrying costs are $73per drum.Determine the EOQ.

To calculate the Economic Order Quantity (EOQ), use the following formula:EOQ = Square Root of [(2 *…

Answered: You purchase lubricating oil in 55-…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Given the following data solve for the eoq time
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To make a product it costs $24 per liter. The importation cost is a fixed cost of $ 150 additional of the unit costs. The time that takes from placing the order to receiving it is 5 weeks. During this time the average consumed is 80 liters with a std dev. of 4 liters. If the products ends the costs is $45 per liter. They work 52 weeks a year. The anual interest is 20% What is the order size and reorder point if we want to accomplish 90% of demand in the cycles? What is the order size and reorder point if we want to minimize average costs? what would be service level type 2?
On average, PT. ABH would order from PT. GDAM 1.000.000 kg Crude Palm Oil (CPO) every month to be used as the raw materials for its production. This amount of CPO is refined and processed to produce cooking oils. The inventory is depleted each month and needs to be reordered. If the carrying cost is IDR 32.000 and the fixed order cost is IDR 4.000.000 (Assume a 360-day year)a. Does PT. ABH already follows an economically advisable strategy?b. If it is further noted that PT.ABH procurement team takes 10 days to place and receive an order and the firm’s production policy requires it to hold 50.000 kg as safety stock to prevent against stockouts. Determine the reorder point that must be set
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You purchase lubricating oil in 55- gallon drums and consume an average of 642 drums per year. Preparing an order and receiving a shipment of lubricant costs $7 per order. Annual carrying costs are $73 per drum. Determine the EOQ.