The optimal size of each production run and the time between runs is to be calculated. Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs. Total cost refers to the addition of fixed and variable cost.

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Answer 1

Question

Chapter 4, Problem 33AP

a

Summary Introduction

Interpretation: The optimal size of each production run and the time between runs is to be calculated.

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

b

Summary Introduction

Interpretation:The fraction of the time that the company is producing high-density 3.5 -inch disks are to be determined

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

c

Summary Introduction

Interpretation:The maximum dollar investment that the company has in these disks is to be determined.

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

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Students have asked these similar questions

Diskup produces a variety of personal computer products. High-density 3.5-inch disksare produced at a rate of 1,800 per day and are shipped out at a rate of 800 per day. Thedisks are produced in batches. Each disk costs the company 20 cents, and the holdingcosts are based on an 18 percent annual interest rate. Shortages are not permitted. Eachproduction run of a disk type requires recalibration of the equipment. The companyestimates that this step costs $180.a. Find the optimal size of each production run and the time between runs

Medtronic sells medical devices. The company enjoys many growth opportunities, and so it measures its inventory holding cost at the rate of 25% per year. It currently turns over its inventory 3 times per year. Its gross margin (the difference between revenue and cost) as a percentage of its revenue is an enviable 65%. a. For an item that costs Medtronic $600 to produce, what would be the cost ($s) to hold this item for one year in inventory? b. For an item that costs Medtronic $350 to produce, what is the cost to hold it in inventory ($s)? (Assume it remains in inventory for the average amount of time for the company.)

Frety Limited sells therapeutic foam rollers for $55, and expects the demand for this product to be constant at 142 units per week. The foam rollers are ordered from a supplier at a price of $39, and each order takes three weeks to supply the product from the date that Frety Limited places an order. The business holds 130 units of the product as a safety buffer at all times. The cost of capital is 10%. At what level of inventory (in units) should the business reorder the foam rollers?

Answer 2

Question

Chapter 4, Problem 33AP

a

Summary Introduction

Interpretation: The optimal size of each production run and the time between runs is to be calculated.

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

b

Summary Introduction

Interpretation:The fraction of the time that the company is producing high-density 3.5 -inch disks are to be determined

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

c

Summary Introduction

Interpretation:The maximum dollar investment that the company has in these disks is to be determined.

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

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Answer 3

Question

Chapter 4, Problem 33AP

a

Summary Introduction

Interpretation: The optimal size of each production run and the time between runs is to be calculated.

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

b

Summary Introduction

Interpretation:The fraction of the time that the company is producing high-density 3.5 -inch disks are to be determined

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

c

Summary Introduction

Interpretation:The maximum dollar investment that the company has in these disks is to be determined.

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

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Answer 4

Question

Chapter 4, Problem 33AP

a

Summary Introduction

Interpretation: The optimal size of each production run and the time between runs is to be calculated.

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

b

Summary Introduction

Interpretation:The fraction of the time that the company is producing high-density 3.5 -inch disks are to be determined

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

c

Summary Introduction

Interpretation:The maximum dollar investment that the company has in these disks is to be determined.

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

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Answer 5

Chapter 4, Problem 33AP

a

Summary Introduction

Interpretation: The optimal size of each production run and the time between runs is to be calculated.

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

b

Summary Introduction

Interpretation:The fraction of the time that the company is producing high-density 3.5 -inch disks are to be determined

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

c

Summary Introduction

Interpretation:The maximum dollar investment that the company has in these disks is to be determined.

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

Answer 6

Chapter 4, Problem 33AP

a

Summary Introduction

Interpretation: The optimal size of each production run and the time between runs is to be calculated.

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

Answer 7

Chapter 4, Problem 33AP

a

Summary Introduction

Interpretation: The optimal size of each production run and the time between runs is to be calculated.

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

Answer 8

b

Summary Introduction

Interpretation:The fraction of the time that the company is producing high-density 3.5 -inch disks are to be determined

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

Answer 9

b

Summary Introduction

Interpretation:The fraction of the time that the company is producing high-density 3.5 -inch disks are to be determined

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

Answer 10

c

Summary Introduction

Interpretation:The maximum dollar investment that the company has in these disks is to be determined.

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

Answer 11

c

Summary Introduction

Interpretation:The maximum dollar investment that the company has in these disks is to be determined.

Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs.

Total cost refers to the addition of fixed and variable cost.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 4.4 - Prob. 1P Ch. 4.4 - Prob. 2P Ch. 4.4 - Prob. 3P Ch. 4.4 - Prob. 4P Ch. 4.4 - Prob. 5P Ch. 4.4 - Prob. 6P Ch. 4.4 - Prob. 7P Ch. 4.4 - Prob. 8P Ch. 4.4 - Prob. 9P Ch. 4.5 - Prob. 10P

The optimal size of each production run and the time between runs is to be calculated. Concept introduction: Economic order quantity refers to the ideal quantity which an organization should order in order to minimize inventory costs. Total cost refers to the addition of fixed and variable cost.

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