Reference no: EM132993042
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.
|
What is the carrying amount
: The present value of the lease payments includes the exercise price of the option, and the discount rate of the lease is 12%. What is the Carrying amount
|
|
What is the dollar amount of income
: If Jill needs to have a total return of 10.6 per cent during the year, then what is the dollar amount of income that she needed to have to reach her objective
|
|
How much is the total cash paid for the retirement of bonds
: On January 1, 2019, Void Company issued 2,000 of its 5-year, P1,000 face value, How much is the total cash paid for the retirement of bonds
|
|
Calculate the sharpe ratio for each of these
: Assuming a risk-free rate of 3.1 percent, calculate the Sharpe ratio for each of these. In broad terms, what do you suppose the Sharpe ratio is intended
|
|
Briefly outline what is a just-in-time system
: Briefly outline what is a Just-in-Time system and explain why inventory holding cost can be regarded as being underestimated traditionally
|
|
What is the inflation premium on a seven-year treasury bond
: Suppose that the annual expected rates of inflation over each of the next five years are 5 percent, What is the inflation premium on a seven-year treasury bond
|
|
Prepare the journal entries on books of Sarasota Corporation
: Prepare the journal entries on the books of Sarasota Corporation to record the transactions described above, assuming that the 20% interest in WLT
|
|
What is the value of this proposal
: If the appropriate discount rate is an APR of 8.5% compounded? monthly, what is the value of this proposal
|
|
Explain the various risks in international trade
: Explain the various risks in international trade. Identify risks that are common in domestic rade and risks that are unique to international trade
|