The EOQ for Part B-22 is 2,500 units, and four orders are placed each year. The total annual ordering cost is $1,200. Which of the following is true? a. The cost of placing one order is $4,800. b. The annual demand for the part is 2,500 units. c. The cost of placing one order is $1,200. d. The total carrying cost is $1,200. e. It is impossible to calculate the annual carrying cost given the above information.

The EOQ for Part B-22 is 2,500 units, and four orders are placed each year. The total annual ordering cost is $1,200. Which of the following is true? a. The cost of placing one order is $4,800. b. The annual demand for the part is 2,500 units. c. The cost of placing one order is $1,200. d. The total carrying cost is $1,200. e. It is impossible to calculate the annual carrying cost given the above information.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 8E: Melchar Company uses 78,125 pounds of oats each year. The cost of placing an order is 18, and the...

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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.
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?
Corazon Manufacturing Company has a purchasing department staffed by five purchasing agents. Each agent is paid 28,000 per year and is able to process 4,000 purchase orders. Last year, 17,800 purchase orders were processed by the five agents. Required: 1. Calculate the activity rate per purchase order. 2. Calculate, in terms of purchase orders, the: a. total activity availability b. unused capacity 3. Calculate the dollar cost of: a. total activity availability b. unused capacity 4. Express total activity availability in terms of activity capacity used and unused capacity. 5. What if one of the purchasing agents agreed to work half time for 14,000? How many purchase orders could be processed by four and a half purchasing agents? What would unused capacity be in purchase orders?
2. The ABC Company consumes inventory of 67,500 units of components per year. The carrying cost per unit is RO 1.50. The fixed order cost is RO 25 per order. The production planning is 365-day year. a. What is the Economic Order Quantity (EOQ)? Interpret. 219 S b. Calculate and interpret the optimal number of orders to be placed. the ida c. If it takes five days to receive an order from suppliers, at what inventory level should ABC Company place another order.Interpret.
Wesley Utility Company uses 2,500 units per year which it stores at $0.50 per unit per annum. The cost to place an order is $100. a) Calculate: i. The economic order quantity (EOQ) b) If the company decides to make the items on its own machine with a potential capacity of 5,000 units per year, calculate: i. The economic order quantity (EOQ) ii. The annual ordering cost iii. The annual carrying cost
A manufacturing company placed an order of 24,000 units semiannually at a price of $20 per unit. Its carryng cost is 15% and the order cost is $12 per order. Required: (i). What is the most economical order quantity? (ii). How many orders need to be placed?
The annual demand for a certain product is 11,340 units. The company informs you that every time an order is placed for this product the cost per order incurred is £100. You are also told that the cost of holding one unit fora year is £0.7. What is the economic order quantity of the product?
An SKU has an annual demand of 10,000 units, each costing $15, ordering costs are$80 per order, and the cost of carrying inventory is 25%. Calculate the EOQ in unitsand then convert to dollars.
The john equipment company estimates its carrying cost at 15% and its ordering cost at $90 per order. The estimated annual requirement is 78,000 units at a price of $4 per unit. Required: (i). What is the most economical no. of units to order? (ii). No. of orders to be placed in a year. (iii). About how often will an order need to be placed?
The Xenopeltis Company estimates its requirement, which is 39,000 units semiannually at a price of $4 per unit. The carrying cost at 15% of the price and its ordering cost at $90 per order. On a 360-day basis, determine the following: To determine the number of orders to be place in a year? A. Total demand per year must be multiplied by the economic order quantity B. Economic order quantity must be divided by the Total demand per year C. Economic order quantity must added to the Total demand per year D. Total demand per year must be divided by the economic order quantity E. Economic order quantity must be subtracted from the Total demand per year
A company has estimated its economic order quantity for Part A at 2,400 units for the coming year. The ordering costs are P200 and carrying costs are P.50 per unit per year. What is the estimated total annual usage?
1. The ACE company estimates its annual requirement requirement is 78,000 units at a price of 4 per unit. The carrying cost at 15% and its ordering cost at 90 per order. Compute the following:a) What is the most economical no. of units to order?b) No. of orders to be placed in a year.c) About how often will an order need to be placed?