Reference no: EM133016442
Question - Geox Ltd buys shoes from a supplier in Italy and sells them on to retailers in Australia. Geox Ltd currently uses an EOQ model to determine the number of shoes to send to order.
The annual demand for shoes is approximately 45,600.
The ordering cost is $55 per order.
The annual cost of physically storing shoes is $8.75 per unit.
The insurance on the inventory (shoes) cost is $4.25 per unit.
The opportunity cost (annual ROI 25% x $30) is $7.50 per unit.
The accountant of Geox Ltd, Richard Branson, recently attended a seminar on Just-in-Time (JIT) and is considering how the ideas of JIT differ from traditional techniques like EOQ and how they may help to manage inventory more efficiently.
REQUIRED -
A) Use the EOQ model to determine the optimal number of shoes per order.
B) If it takes two weeks to receive an order, at what point should Geox Ltd reorder shoes?
C) Geox Ltd has determined that demand may vary from the average by up to 25%. To handle the variation in demand, Geox Ltd has decided that it should maintain enough safety stock to cover any demand level. How much safety stock should the Sydney warehouse hold? How will this affect the reorder point and reorder quantity?
D) Briefly outline what is a Just-in-Time system and explain why inventory holding cost can be regarded as being underestimated traditionally, providing examples of component parts of that cost.
|
Explain johnson-johnson decision
: Explain Johnson & Johnson's decision about its Tylenol product as described in the reading using course concepts and theories. Do you agree with Johnson & J
|
|
How you could use the findings to help others deal
: How can you apply three chosen leadership strategies that you have researched in this unit to improve your personal growth? Provide specific examples and indica
|
|
How much should be debited to land account
: On October 1, 2018, Branded Corporation exchanged 20,000 shares of its P 200 par value of Ordinary Shares for land. How much should be debited to land account
|
|
British airlines and singapore airlines
: Qantas benchmarking compared with British airlines and Singapore airlines
|
|
At what point should geox ltd reorder shoes
: The opportunity cost (annual ROI 25% x $30) is $7.50 per unit. If it takes two weeks to receive an order, at what point should Geox Ltd reorder shoes
|
|
Prepare comparative income statements
: Prepare comparative income statements to show effect of this error on the company's cost of goods sold and gross profit for each of Year 1, Year 2, and Year 3
|
|
Collect data on the number of customer services
: ? A bank wishes to collect data on the number of customer services and the frequency ofcustomer use of these services.
|
|
What is the total assets
: Fixed Assets is 283.50, Net Income is 50.00, Current Liabilities is 105.50, Current Ratio is 3.00x, Sales is 1000.00. Given the data what is the total assets
|
|
Conduct a financial cost-benefit analysis
: Explain how Amazon might conduct a financial cost-benefit analysis of two day delivery. How would this financial cost-benefit analysis differ from an economic c
|