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FINANCIAL ACCOUNTING
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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Net Steels is a steel manufacturing company. It currently orders 180 metric tons of raw material per order. It was observed that the company often faces stockout. To tackle this issue, the company incorporated a fixed-quantity system (FQS) and collected the following data. The lead time is 2 weeks. Demand Order Cost Item Cost Inventory-Holding Cost 10000 metric tons per year $17000 per order $38000 per year 20 percent per year Assuming there are 50 weeks a year, determine the reorder point. Only for non-integer results, round your answer UP to the nearest integer. For example, if your answer is 5.05, type 6; if your answer is 5, type 5. 2DCO Economic Order Quantity (EOQ), Q* = Cn Reorder point, r = demand rate x lead time Your Answer: Answer
Transcribed Image Text:Net Steels is a steel manufacturing company. It currently orders 180 metric tons of raw material per order. It was observed that the company often faces stockout. To tackle this issue, the company incorporated a fixed-quantity system (FQS) and collected the following data. The lead time is 2 weeks. Demand Order Cost Item Cost Inventory-Holding Cost 10000 metric tons per year $17000 per order $38000 per year 20 percent per year Assuming there are 50 weeks a year, determine the reorder point. Only for non-integer results, round your answer UP to the nearest integer. For example, if your answer is 5.05, type 6; if your answer is 5, type 5. 2DCO Economic Order Quantity (EOQ), Q* = Cn Reorder point, r = demand rate x lead time Your Answer: Answer
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