A merchandising company sells a particular product that is estimated to have approximately 1,500 sales this year. The purchasing department estimates that it will cost approximately $200 to place an order for this product: $180 fixed and $20 variable. The total annual carrying cost for this product is $1,500. What is the product’s EOQ? A. 775 B. 19 C. 735 D. 20
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A merchandising company sells a particular product that is estimated to have approximately 1,500 sales this year. The purchasing department estimates that it will cost approximately $200 to place an order for this product: $180 fixed and $20 variable. The total annual carrying cost for this product is $1,500. What is the product’s EOQ? A. 775 B. 19 C. 735 D. 20
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- Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the economic order quantity. 2. Compute the ordering, carrying, and total costs for the EOQ. 3. How much money does using the EOQ policy save the company over the policy of purchasing 4,000 plastic housing units per order?Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the annual ordering cost. 2. Compute the annual carrying cost. 3. Compute the cost of Ottiss current inventory policy. Is this the minimum cost? Why or why not?Melchar Company uses 78,125 pounds of oats each year. The cost of placing an order is 18, and the carrying cost for one pound of oats is 0.45. Required: 1. Compute the economic order quantity for oats. 2. Compute the carrying and ordering costs for the EOQ.
- 4. Genesis Company is a wholesaler. It purchases 60,000 units of Product X per month for sale to retailers. The cost of placing an order is P100. The cost of holding one unit of inventory for one year is P4. Note: Kindly input your answer with comma. Example: 10,000 Required: a. Compute the economic order quantity. b. How many orders would be placed under the EOQ policy? c. Compute the annual ordering cost for the EOQ. d. Compute the annual carrying cost for the EOQ. e. Compute the total inventory-related cost at the EOQ.A supplier sells MF Tires to dealers. The annual demand is approximately1,000 tires. The supplier pays P50 for each tire and estimates that the annualholding cost is 20 percent of the total value of tires. It costs approximatelyP25 to place an order. The supplier currently orders 80 tires per month.Required:a. Calculate ordering, holding, and total inventory costs for thecurrent ordered quantity.b. Determine the EOQ.c. How many orders will be placed per year using the EOQ?d. Calculate ordering, holding, and total inventory costs for the EOQand also determine the change in total inventory cost.A. Genesis Company is a wholesaler. It purchases 60,000 units of Product X per month for sale to retailers. The cost of placing an order is P100. The cost of holding one unit of inventory for one year is P4. Required: 1. Compute the economic order quantity. 2. How many orders would be placed under the EOQ policy? 3. Compute the annual ordering cost for the EOQ. 4. Compute the annual carrying cost for the EOQ. 5. Compute the total inventory-related cost at the EOQ. 6. Previously, the company had been purchasing 5,000 units of product X per order: What is the ordering cost per year under the previous policy? ii. The annual carrying cost? iii. How much money does the company save over the policy of purchasing 5,000 units per order using the EOQ policy? i. B. Kings Company presents the following information: 1. Annual credit sales: P 25,200,000 2. Collection period: 3 months 3. Rate of return: 12% Kings company considers changing its credit term from n/30 to 3/10, 1/30. The following are…
- Activities/Assessments: Activity 9 Solve the following EOQ model problems: 1. Each year, Y Company purchases 20,000 units of an item that costs P 640 per unit. The cost of placing an order is P 480, and the cost to hold the item in inventory for one year is P 150. a. Determine the EOQ. b. What is the average inventory level, assuming that the minimum inventory level is zero? c. Determine the total annual ordering cost and the total annual holding cost for the item if the EOQ is used. 2. A toy manufacturer uses approximately 32,000 silicon chips annually. The chips are used at a steady rate during the 240 days the plant operates. Annual holding cost is P27 per chip and ordering cost is P1,080. Lead time = 1 week. a. Find the EOQ. b. Find the reorder point. c. What would be your ordering policy for this item? d. Find the total annual cost of ordering and carrying silicon chips. 3. A large bakery buys sugar in 50-kg bags. The bakery uses an average of 1,344 bags a year. Preparing an order…An automobile parts supplier sell Excel brand batteries to van dealers. The annual demand is approximately 1,000 batteries. The supplier pays RO 20 for each battery and estimates that the annual holding cost is 30 percent of the battery’s value. It costs approximately RO 10 to place an order. The supplier currently orders 20 batteries per month. Determine the economic order quantity. a. 57.74 units b. 28.28 units c. 28.82 units d. 82.82 unitsQuestion 3:A supplier sells Hipoint-brand pens to stationary shops. The annual demand isapproximately 24,000 pens. The supplier pays SR5 for each pen and estimates that theannual holding cost is 30 percent of the pen's value. It costs approximately SR350 to placean order. The supplier currently buys 1000 pens per orderi. Determine the annual ordering and inventory cost (in SR) for current orderquantity.ii. Determine the economic order quantity (EOQ).iii. Determine the total annual cost for the EOQ
- QUESTION 1 The following information regarding the purchases and issues to production or component J for a project of Kia Limited during April 2020 is available: Purchases April Units Total invoice price 01 13 000 R91 000 10 15 000 R120 000 20 14 000 R126 000 Issues to production April Units 05 8 000 15 9 000 25 13 000 Refer to the information provided above and answer the following questions: 1.1.1 Use the first-in-first-out (FIFO) method to complete the following table for the transactions provided below: Purchases Issues Balance Date Quantity Price Amount Quantity Price Amount Quantity Price Amount 1.1.2 Use the weighted average cost method to complete the above table for the transactions up to 15 April 2020 only. Where applicable, round off the weighted average cost per unit to the nearest cent and other amounts to the nearest Rand.A microbrewery purchases malt for production. The supplier charges $35 for delivery (no matter how much is delivered) and $1.20 per gallon. The annual holding cost is 35% of the price per gallon. Usage is 250 gallons/week. a) If the order quantity is 1000 gallons, what is the average inventory? b) If the order quantity is 1500 gallons, how many orders are placed each year? c) What is the EOQ quantity? d) If the order quantity is 2500 gallons, what is the sum of the ordering and holding costs PER GALLON? e) If orders are for the EOQ amount, what is the annual cost of the inventory system as a percentage of the annual purchase cost? f)If orders must be in integer multiples of 1000 gallons, how much should be ordered to minimize ordering and holding costs PER GALLON? g) A 3% purchase price discount is given if orders are for 8000 gallons or more. What would total annual costs (purchasing, ordering, and holding) be using this discount?5. Genesis Company is a wholesaler. It purchases 60.000 units of Product X per month for sale to retailers. The cost of placing an order is P100. The cost of holding one unit of inventory for one year is P4. Note: Kindly input your answer with comma. Example: 10,000 Required: Previously, the company had been purchasing 5,000 units of product X per order: a. What is the ordering cost per year under the previous policy? b. The annual carrying cost? c. How much money does the company save over the policy of purchasing 5,000 units per order using the EOQ policy?