Solution-At what point should managers reorder the steering

At what point should managers reorder the steering wheels

Assignment Help Managerial Accounting

Reference no: EM13865767

Problem- EOQ, uncertainty, safety stock, reorder point. Stewart Corporation is a major automobile manufacturer. It purchases steering wheels from Coase Corporation. Annual demand is 10,400 steering wheels per year or 200 steering wheels per week. The ordering cost is $100 per order. The annual carrying cost is $13 per steering wheel. It currently takes 1.5 weeks to supply an order to the assembly plant

1. What is the optimal number of steering wheels that Stewart's managers should order according to the MG model?

2. At what point should managers reorder the steering wheels, assuming that both demand and purchase-order lead time are known with certainty?

3. Now assume that demand can vary during the 1.5-week purchase-order lead time. The following table shows the probability distribution of various demand levels:

Total Demand for Steering Wheels for 1.5 Weeks	Probability of Demand (sums to 1)
100	0.15
200	0.20
300	0.40
400	0.20
500	0.05

Reference no: EM13865767

Questions Cloud

State of strain at a point of an elastic solid : The state of strain at a point of an elastic solid is given in the x-y-z coordinates by:

Journalize the following transactions : Journalize the following transactions. Prepare the Income Statement .Statement of Retained Earnings ,Balance Sheet and Statement of Cash Flows using direct method. Hamilton Company

Describe the key elements of a solid emergency response : Describe the key elements of a solid emergency response program

Compute the present value of the complete package : As a result of a slowdown in operations, Mercantile Stores is offering to employees who have been terminated a severance package of $ 100,000 cash; another $ 100,000 to be paid in one year; and an annuity of $ 30,000 to be paid each year for 20 years..

At what point should managers reorder the steering wheels : At what point should managers reorder the steering wheels, assuming that both demand and purchase-order lead time are known with certainty?

At the end of the year panda inn owns : At the end of the year Panda Inn owns a fleet of 15 trucks all of which have 10 year useful lives, $1,000 residual values and are depreciated under GAAPs straight-line method. The CEO has authorized the sale of one five-year-old truck whose original ..

Do you agree with the decision to remove the art : Article - Public Art; The Tilted Arc (Article) Give a synopsis of the article. Do you agree with the decision to remove the art? Why

Write down the fractional coordinates : (a) Write down the fractional coordinates of all the atoms in the unit cell. (b) Write down the formula for structure factor Fhkl, taking the atomic form factor of silicon as fSi.

Gunning''s stock has exhibited a standard deviation : Gunning's stock has exhibited a standard deviation in returns of 0.5, whereas Avon stock has exhibited a standard deviation of 0.9. The correlation coefficient between the stock return is 0.2. What is the standard deviation of a portfolio composed of..

User Account

All Pages

At what point should managers reorder the steering wheels

Reference no: EM13865767

Reference no: EM13865767

Questions Cloud

Reviews

Write a Review

Managerial Accounting Questions & Answers

Manage budgets and financial plans

Prepare a retained earnings statement

Prepare a master budget for the three-month period

Construct the companys direct labor budget

Evaluate the predetermined overhead rate

Determine the company''s bid

Compute the pool rates for the different activities

Prepare Company financial statements

Prepare an analysis of terracycles

Discuss the ethical issues

Political resources in emerging markets

Management accounting - ehsan electronics company

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT