Techno Gadgets Corp. produces J-Pods, music players that can download thousands of songs. Techno Gadgets forecasts that demand in 2020 will be 19,800 J-Pods. The variable production cost of each J-Pod is $55. In its MRP system, due to the large $17,600 cost per setup, Techno Gadgets plans to produce J-Pods once a month in batches of 1,650 units. The carrying cost of a unit in inventory is $16 per year. Read the requirements LOADING... . Question content area bottom Part 1 Requirement 1. Using the MRP system, what is the annual cost of producing and carrying J-Pods in inventory? (Assume that, on average, half of the units produced in a month are in inventory.) Begin by determining the formula, then calculate the annual cost of producing and carrying J-Pods in inventory, using an MRP system. (Round your answer to the nearest whole dollar.) Cost of producing Total variable production cost + Total setup cost + Carrying cost = and carrying $1,089,000 + $211,200 + $13,200 = $1,313,400 Part 2 Requirement 2. A new manager at Techno Gadgets has suggested that the company use the EOQ model to determine the optimal batch size to produce. (To use the EOQ model, Techno Gadgets needs to treat the setup cost in the same way it would treat ordering cost in a traditional EOQ model.) Determine the optimal batch size and number of batches. Round up the number of batches to the nearest whole number. What would be the annual cost of producing and carrying J-Pods in inventory if it uses the optimal batch size? Compare this cost to the cost calculated in requirement 1. Comment briefly. Begin by selecting the formula used to calculate EOQ. (D=Demand in units for one year, P=Ordering cost per purchase order, C=Carrying cost of one unit in stock, Q=Any order quantity.) ModifyingAbove EOQ equals StartRoot StartFraction 2 DP Over Upper C EndFraction EndRoot With Subscript EOQ=2DPC Part 3 (Round your final answer to the nearest whole number.) The optimal batch size is J-pods.
Techno Gadgets Corp. produces J-Pods, music players that can download thousands of songs. Techno Gadgets forecasts that demand in 2020 will be 19,800 J-Pods. The variable production cost of each J-Pod is $55. In its MRP system, due to the large $17,600 cost per setup, Techno Gadgets plans to produce J-Pods once a month in batches of 1,650 units. The carrying cost of a unit in inventory is $16 per year. Read the requirements LOADING... . Question content area bottom Part 1 Requirement 1. Using the MRP system, what is the annual cost of producing and carrying J-Pods in inventory? (Assume that, on average, half of the units produced in a month are in inventory.) Begin by determining the formula, then calculate the annual cost of producing and carrying J-Pods in inventory, using an MRP system. (Round your answer to the nearest whole dollar.) Cost of producing Total variable production cost + Total setup cost + Carrying cost = and carrying $1,089,000 + $211,200 + $13,200 = $1,313,400 Part 2 Requirement 2. A new manager at Techno Gadgets has suggested that the company use the EOQ model to determine the optimal batch size to produce. (To use the EOQ model, Techno Gadgets needs to treat the setup cost in the same way it would treat ordering cost in a traditional EOQ model.) Determine the optimal batch size and number of batches. Round up the number of batches to the nearest whole number. What would be the annual cost of producing and carrying J-Pods in inventory if it uses the optimal batch size? Compare this cost to the cost calculated in requirement 1. Comment briefly. Begin by selecting the formula used to calculate EOQ. (D=Demand in units for one year, P=Ordering cost per purchase order, C=Carrying cost of one unit in stock, Q=Any order quantity.) ModifyingAbove EOQ equals StartRoot StartFraction 2 DP Over Upper C EndFraction EndRoot With Subscript EOQ=2DPC Part 3 (Round your final answer to the nearest whole number.) The optimal batch size is J-pods.
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Your Question:
Techno Gadgets
Corp. produces J-Pods, music players that can download thousands of songs.
Techno Gadgets
forecasts that demand in
2020
will be
19,800
J-Pods. The variable production cost of each J-Pod is
$55.
In its MRP system, due to the large
$17,600
cost per setup,
Techno Gadgets
plans to produce J-Pods once a month in batches of
1,650
units. The carrying cost of a unit in inventory is
$16
per year.Read the
requirements
LOADING...
.Question content area bottom
Part 1
Requirement 1. Using the MRP system, what is the annual cost of producing and carrying J-Pods in inventory? (Assume that, on average, half of the units produced in a month are in inventory.)
Begin by determining the formula, then calculate the annual cost of producing and carrying J-Pods in inventory, using an
MRP
system. (Round your answer to the nearest whole dollar.)
|
|
|
|
|
|
Cost of producing
|
Total variable production cost
|
+
|
Total setup cost
|
+
|
Carrying cost
|
=
|
and carrying
|
$1,089,000
|
+
|
$211,200
|
+
|
$13,200
|
=
|
$1,313,400
|
Part 2
Requirement 2. A new manager at
Techno Gadgets
has suggested that the company use the EOQ model to determine the optimal batch size to produce. (To use the EOQ model,
Techno Gadgets
needs to treat the setup cost in the same way it would treat ordering cost in a traditional EOQ model.) Determine the optimal batch size and number of batches. Round up the number of batches to the nearest whole number. What would be the annual cost of producing and carrying J-Pods in inventory if it uses the optimal batch size? Compare this cost to the cost calculated in requirement 1. Comment briefly.Begin by selecting the formula used to calculate
EOQ.
(D=Demand
in units for one year,
P=Ordering
cost per purchase order,
C=Carrying
cost of one unit in stock,
Q=Any
order quantity.)ModifyingAbove EOQ equals StartRoot StartFraction 2 DP Over Upper C EndFraction EndRoot With Subscript EOQ=2DPC
Part 3
(Round your final answer to the nearest whole number.)
The optimal batch size is
|
|
J-pods.
|
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