(a) How much is the order quantity based on EOQ model? (b) How much is the total cost using EOQ ,mode1?
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- Jack Ltd is a market leader in the manufacture of apple juice. They operate a reorder level system of inventory management, and the following information is available for green apples: Average usage 800 per dayMinimum usage 450 per dayMaximum usage 1260 per dayLead time for replenishment 16-20 dayReorder quantity 19,500 apples a) Calculate the reorder level b) Calculate the maximum level of inventory c) Calculate the minimum (buffer) inventory levelA firm has beginning inventory of 150 units at a cost of $10 each. Production during the period was 650 units at $13 each. If sales were 600 units, what is the cost of goods sold (assume FIFO)? What is the value of the ending inventory using FIFO? Show your work I also want to learn how to get the answer to this, can you please help provide how you got the answers.You have just been appointed as financial manager of Slow-Moving-Stock Limited. One of your main focus areas is to improve the inventory management system that the company currently has in place. You have extracted the following records from the Inventory Management Software. ITEM X4355 January February March April May June July August September October November December Normal days for delivery Maximum days for delivery Cost of placing an order Carrying cost of a unit per year Total Sales (u) 1500 1300 1200 1100 1100 1100 1500 1600 1700 1800 2500 1900 18300 a) Determine and comment on the inventory days ratio. ( b) Determine the appropriate reorder level for Item X4355. c) Determine the Economic order quantity for Item X4355. ( 5 8 R850 R250 Trading days 20 18 20 19 20 21 22 20 20 21 22 17 240 You also found that total purchases for all items for the year was R55 000 000 with the end of year inventory value being R26 000 000.
- A company wishes to establish an EOQ for an item for which the annual demandis $800,000, the ordering cost is $32, and the cost of carrying inventory is 20%.Calculate the following:a. The EOQ in dollars.b. Number of orders per year.c. Cost of ordering, cost of carrying inventory, and total cost.d. How do the costs of carrying inventory compare with the costs of ordering?An organization implements a constant order quantity inventory system. The setup (procurement) cost per transaction: $58 The annual demand in units: 2500 The cost of each inventory unit: $10 The annual holding cost as a percentage of unit inventory cost: 30% Determine the optimal order quantity rounded to the nearest whole unit.Title 1. You are inventory manager of Diego Supplies Inc. You computed the EOQ to be 500 units. Annual... Description </o:p> 1. You are inventory manager of Diego Supplies Inc. You computed the EOQ to be 500 units. Annual demand for the company is 5,000 units, and holding cost is $4 per unit. What is the ordering cost? 2. G-Tech’s monthly demand is 250 units. You are in charge of the inventory department. You know that the holding cost is $60 per unit and ordering cost is $100 per order. What is the EOQ? What is the number of orders per year? What is the annual holding cost? If lead time L is one week and demand rate is 60 units per week, what is the ROP?
- Case Study 4: Inventory Management. (II) A regional distributor purchases discontinued appliances from various suppliers and then sells them on demand to retailers in the region. The distributor operates 5 days per week, 52 weeks per year. Only when it is open for business can orders be received. Management wants to reevaluate its current inventory policy, which calls for order quantities of 440 counter-top mixers. The following data are estimated for the mixer: Average daily demand 100 mixers Standard deviation of daily demand 30 mixers Lead time (L) = 3 days Holding Cost (H) = $9.40/order/year Ordering Cost (S) = $35/order Cycle service level = 92% The distributor uses a continuous review (Q) system What order quantity, Q, and reorder point, R, should be used? What is the total annual cost of the system? If on-hand inventory is 40 units, one open order for 440 mixers is pending and no back orders exist, should a new order be placed?Fan Base (FB) operates a megastore featuring sports merchandise. It uses an E0Q decision model to make inventory decisions. It is now considering inventory decisions for its Los Angeles Galaxy soccer jerseys product line. This is a highly popular item. Data for 2011 are as follows: Expected annual demand for Galaxy jerseys Ordering cost per purchase order Carrying cost per year Each jersey costs FB $40 and sells for $80. The $7 carrying cost per jersey per year comprises the required return on investment of $4.80 (12% x $40 purchase price) plus $2.20 in relevant insurance, handling, and theft-related costs. The purchasing lead time is 7 days. FB is open 365 days a year. a) Calculate the E0Q. Required 10,000 $200 $7 per jersey b) Calculate the number of orders that will be placed each year. c) Calculate the reorder point.Folsom River products is contemplating the use of economic order quantity analysis to optimize inventory ordering activities and minimize inventory cost. Below are data for three products the company sells. product RS2 PM3 SNZ Annual demand in units 24, 500 16,000 5,000 Cost per unit $50 $20 $10 Cost to place an order $100 $60 $40 carrying cost as a percent of product cost 20% 10% 16% Required: a) Compute Economic order quantity b) Determine the number of orders placed annualy for each of the product c) Compute the total annual inventory ordering costs for the three products combined.
- You are considering purchasing 850 units of inventory. Requirements: 1. Determine which supplier offers the lowest net cost. Price Terms Freight (total) Descriptions Analysis Company A $42.00 1/10 n/30 Company A Company B $40.00 2/10 n/30 $200.00 Company B 2. Which company provided the best deal (A or B)? 3. What was the total price for all units from tha 4. Using the company which yielded the better price a. Journalize the purchase price (for any freight debit Merchandise Inventory and credit cash in a separate entry) b. Payment within the discount period (be sure to take any discount) c. a cash refund of 12 defective units (remember you took a discount on the purchase price) Journal Entries Account Debit Credit10. Now assume the same information: The Beach Bum Surf Co. is evaluating the inventory of its most popular boogie board as the summer season ends. They had beginning inventory of 20 boards at a cost of $25. Then purchases of 130 boards at $27 each, 140 boards at $28 each, and 135 boards at $30 each. If ending inventory is 15 boards and Beach Bum uses the average cost method, what would be the dollar amount assigned to cost of goods sold?Carter Company orders 250 units at a time, and places 15 orders per year. Total ordering cost is $1,100 and total carrying cost is $1,100. Which of the following statements is true? The economic order quantity (EOQ) is 250. The economic order quantity (EOQ) is less than 250. Total inventory-related cost is lower than it would be at the economic order quantity (EOQ). The economic order quantity (EOQ) is more than 250.