Economic order quantityspeedy manufacturers wishes to

Assignment Help Corporate Finance

Reference no: EM13381404

Economic Order Quantity

Speedy Manufacturers wishes to determine the economic order quantity (EOQ) for a critical and expensive inventory item that is used in large amounts at a relatively constant rate throughout the year.

The firm uses 223 200 units of the item annually. It has order costs of R150 per order, and its carrying costs associated with this item are R20 per unit per year.

The rm plans to hold safety stock of the Item equal to 4 days of usage, and it estimates that it takes 10 days to receive an order of the item once placed. Assume a 360 day year.

Required:

1 Calculate the firm's EOQ for the item of inventory described above.

2 What is the firm's total cost based upon the E00 calculated in 1.

3 How many units of safety stock should the firm hold?

4 What is the firm's re-order point for the item on inventory being evaluated?

Reference no: EM13381404

Questions Cloud

The strong dualism position of descartes suggests that the : the strong dualism position of descartes suggests that the mind is fully separate from the brain and that therefore

Question 1many liberation movements began on the home front : question 1many liberation movements began on the home front during the vietnam war. chose one movement black power

1 during the past five years you owned two stocks that had : 1. during the past five years you owned two stocks that had the following annual rates of returnyear stock tnbsp stock

1 mr smith can cause an accident which entails a monetary : 1. mr. smith can cause an accident which entails a monetary loss of 1000 to ms. adams. the likelihood of the accident

Economic order quantityspeedy manufacturers wishes to : economic order quantityspeedy manufacturers wishes to determine the economic order quantity eoq for a critical and

Gearing tobi industries wishes to undertake a project that : gearing tobi industries wishes to undertake a project that will cost r2 500 000. the project has already been evaluated

Capital budgeting techniquessea cable industries is a : capital budgeting techniquessea cable industries is a company involved in the manufacture of marine cables. the company

Lease or buy decisionlarine industries wants an airplane : lease or buy decisionlarine industries wants an airplane available for use by its corporate staff. the airplane that

You have observed the following returns over timeyear stock : you have observed the following returns over timeyear stock x stock y market 2006 14 13 12 2007 19 7 10 2008 16 5 12

User Account

All Pages