Macagba Company uses 1,100 units of an particular item each year. Carrying the item in inventory costs $200 per unit per year. It costs $150 for each order of the chemical. Macagba uses the item at a constant rate each year. Calculate the Economic Order Quantity. 40.62 Use the data from above and assume that Macagba Company operates 250 days per year. Also assume that its total usage is 1,100 units per year. There is a lead time of 2 days and Macagba desires to keep a safety stock of 4 units. Calculate the reorder point.

Macagba Company uses 1,100 units of an particular item each year. Carrying the item in inventory costs $200 per unit per year. It costs $150 for each order of the chemical. Macagba uses the item at a constant rate each year. Calculate the Economic Order Quantity. 40.62 Use the data from above and assume that Macagba Company operates 250 days per year. Also assume that its total usage is 1,100 units per year. There is a lead time of 2 days and Macagba desires to keep a safety stock of 4 units. Calculate the reorder point.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 2CE

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