Intermediate Financial Management
14th Edition
ISBN: 9780357516782
Author: Brigham, Eugene F., Daves, Phillip R.
Publisher: Cengage Learning
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Chapter 23, Problem 9MC
Summary Introduction
Case summary:
Person A the
She planned to use an example of Company’s “big ticket” items which is a customized computer microchip used in the company’s laptop. She planned to start the discussion by explaining some basic inventory concept. She asked person X to help her by way of answering the questions.
Characters in the case:
Person A- Financial manager of Company W
Person FW- CEO of the company
Person X-Assistant of person A
To determine: Whether EOQ model can be used in the given situation
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Students have asked these similar questions
a) Compare the periodic versus the perpetual system as a control device.
b) What sort of organisations are likely to use the periodic inventory system?What kind of organisations will prefer to use perpetual inventory system?c) If management overstated the valuation of inventory, would it affect profit for the year?
Which of the following statements is NOT true of Economic Order Quantity?
O A. The economic order quantity mathematically determines the minimum total inventory cost
B. The EOQ is directly proportional to the sales per period
O C. The optimal order size is determined by the EOQ model
D. The EOQ ignores inventory reorder costs and inventory carrying costs
What is inventory turnover ratio time study observation? Time Formulas and standard data and what are the methods to remove error in time measurement?
Chapter 23 Solutions
Intermediate Financial Management
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- Which of the following is an advantage of the periodic inventory system? A. frequent physical inventory counts B. cost prohibitive C. time consuming D. real-time information for managersarrow_forwardWhat are the advantages and disadvantages of each of the following for a company that has greatly fluctuating sales during the year? a. A stable production policy b. A stable inventory policyarrow_forward17. Models of inventory systems frequently consider the relationships among a beginning inventory, a production quantity, a demand or sales, and an ending inventory. For a given production period j, let * 2, d, beginning inventory for period j (ending inventory from period j-1 production quantity in period j demand in period j ending inventory for period j a. Write the mathematical relationship or model that shows ending inventory as a function of beginning inventory, production, and demand. b. What constraint should be added if production capacity for period j is given by C, ? e. What constraint should be added if inventory requirements for period j mandate an ending inventory of at least 1;?arrow_forward
- Gross profit will result if: Choose operating expenses are less than net income naging inventories sales revenues are greater than operating expenses sales revenues are greater than cost of goods sold operating expenses are greater than cost of goods soldarrow_forwardDefine days sales outstanding (DSO). What can be learned from it, and how is itaffected by seasonal sales fluctuations?arrow_forwardWhich of the following is used to analyze the efficiency and effectiveness of inventory management? inventory turnover only days’ sales in inventory only both inventory turnover and days’ sales in inventory neither inventory turnover nor days’ sales in inventoryarrow_forward
- Which one of the following is a reason for the just- in-time inventory policy? Select one: A. The manufacturer may want to ensure that production is uninterrupted. B. It is possible that future supplies may become scarce. C. The manufacturer wants to keep the investment in inventory to a minimum. D. The prices of the materials are expected to rise shortly.arrow_forwardHow should accounting be able to catch up with the high sales return rates, particularly on inventory management?arrow_forwardWhen inventory costs rise and inventory quantities are not decreasing, what does the LIFO produces?arrow_forward
- Indicate by a (1), (2), or (0) whether each of the following events wouldprobably cause average annual inventory holdings to rise, fall, or be affectedin an indeterminate manner:b. We change from producing just-in-time to meet seasonaldemand to steady, year-round production. __________arrow_forwardCompared to using the weighted average cost method to account for inventory, during aperiod in which prices are generally rising, the current ratio of a company using the FIFOmethod would most likely be:A. lower.B. higher.C. dependent upon the interaction with accounts payable.arrow_forwardWhat does a very high inventory turnover ratio signify? Please provide your own example to explain your point.arrow_forward
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Inventory management; Author: The Finance Storyteller;https://www.youtube.com/watch?v=DZhHSR4_9B4;License: Standard Youtube License