User Account

All Pages

Inventory control system-what is economic ordering quantity

Assignment Help Financial Management
Reference no: EM131021493

Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores . Fisk anticipates sales of 75,000 units per year, an ordering cost of $8 per order, and carrying costs of $1.20 per unit.

a. What is the economic ordering quantity?

b. How many orders will be placed during the year?

c. What will the average inventory be?

d. What is the total cost of ordering and carrying inventory?

Plus following additional information regarding Fisk Corporation. Fist operates a 300-day or 50-week cycle; keeps one order size of EOQ as safety stock to be used against unfavorable events; it takes 6 business days to receive a new shipment from suppliers. Based on this new information calculation following questions:

1. Usage rate in units.

2. How often Fisk should place an orders?

3. At what level of inventory the order is placed? Both with and without safety stock?

4. What is total cost of inventory with bith safery stock and without safety stock?

5. What assumptions are made about the EOQ model?

6. If Fisk uses just-in-time inventory system, what effect is that likely to have on the number and location of suppliers?

PLEASE EXPLAIN IN DETAILS 

Reference no: EM131021493

Questions Cloud

Land and buildings are examples of real property investments : Land and buildings are examples of real property investments. A Unites States Savings Bond is an example of an investment as defined in the text. Banks and insurance companies are examples of institutional investors. Investing online is usually less ..
Hedges exposed to basis risk : An unexpected strengthening of the basis will benefit which of the following hedges exposed to basis risk? a. Long Hedge b. Both a Short and Long Hedge c. A Perfect Hedge d. A Cross Hedge e. Short Hedge
What is the present value : What's the present value of a $930 annuity payment over five years if interest rates are 9 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Conservative and aggressive investors : Describe how, if at all, conservative and aggressive investors might use each of the following type of transactions as part of their investment programs. Contrast these two types of investors in view of these preferences. a. Long purchase b. Margin t..
Inventory control system-what is economic ordering quantity : Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores . Fisk anticipates sales of 75,000 units per year, an ordering cost of $8 per order, and carrying costs of $1.20 per unit. Wh..
Decide whether to apply for a credit card or a debit card : Scott Bauer is trying to decide whether to apply for a credit card or a debit card. He has $8,500 in a savings account at the bank and spends his money frugally. What advice would you have for Scott? Describe the benefits and drawbacks of each type o..
You pay off this loan your total finance costs : You just bought a car and borrowed $15,000 for 5 years at 8% APR. Using the simple interest method; by the time you pay off this loan your total finance costs will be closest to which of the following?
More important and essential for a corporation or mentor : Suppose an organization must make a decision regarding the cycle over which they may have more control, whether it's a focus on inventory and the receipt of cash from the receivables or the illusion of the emph a sis on the payment or payables, which..
The single-period binomial option pricing approach : The current price of a stock is $16. In 6 months, the price will be either $20 or $12. The annual risk-free rate is 7%. Find the price of a call option on the stock that has a strike price of $15 and that expires in 6 months.

Reviews

Write a Review

Financial Management Questions & Answers

  Two independent projects with the cash flows

You are considering two independent projects with the following cash flows. The required return for both projects is 10%. Given this information, which one of the following statements is correct? You should accept project B since it has the higher IR..

  Investment satisfies normal distribution with expected value

Assume that the annualized growth rate G of your investments satisfies a normal distribution with an expected value of v=7% and a standard deviation = 20%. What is the probability that you will triple your money after 5 years of investing? After 10 y..

  Cash break-even analysis

Air Purifier Inc. computes its break-even point strictly on the basis of cash expenditures related to fixed costs. Its total fixed costs are $2,450,000, but 15 percent of this value is represented by depreciation. Its contribution margin (price minus..

  Working capital will revert back to normal at end of project

Your firm is contemplating the purchase of a new $660,000 computer-based order entry system. The system will be depreciated straight-line to zero over its six-year life. It will be worth $52,000 at the end of that time. You will be able to reduce wor..

  Compute the price of bonds based on semiannual analysis

Heather Smith is considering a bond investment in Locklear Airlines. The $1,000 par value bonds have a quoted annual interest rate of 11 percent and the interest is paid semiannually. The yield to maturity on the bonds is 14 percent annual interest. ..

  Both a call option and a put option

There is both a call option and a put option available on PQA Co. stock. Both options have a strike price of $23. Both options have a premium of $4. Is the current stock price higher or lower than $23 in the following two cases?

  Calculate net present worth of tax savings associated

You work for a natural gas pipeline company; it has just spent $150,000,000 (fixed capital investment) building a new pipeline network that it plans to operate for 30 years. calculate the net present worth of the tax savings associated with both sche..

  Statements must be true about securities

Stock A's beta is 1.7 and Stock B's beta is 0.7. Which of the following statements must be true about these securities? (Assume market equilibrium.)

  A bill is mailed to a client for services rendered

A bill is mailed to a client for services rendered. it will be paid in the following accounting period. Which of the following would be true as a result of mailing the bill to the client?

  What must coupon rate be on these bonds

Rhiannon Corporation has bonds on the market with 22.5 years to maturity, a YTM of 6.90 percent, and a current price of $1,057. The bonds make semiannual payments. What must the coupon rate be on these bonds?

  Calculate the subscription ratio

The market capitalization of NYC company is $10,000,000, the current share price is $40. NYC plans to raise new equity in an SEO, it plans to issue 100,000 new shares. Calculate the subscription ratio.

  What are the current restocking costs

The Trektronics store begins each week with 220 phasers in stock. This stock is depleted each week and reordered. The carrying cost per phaser is $17 per year and the fixed order cost is $32. What are the current total carrying costs? What are the cu..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd