Reference no: EM132169601
1. A product is produced in batches of 36,000 units. The machine in which the product is manufactured has a production rate of 500,000 units per year, the product is continuously added to the inventory while the machine is producing. The demand for the product is uniform during the year at a rate of 380,000 units per year. The production it does not start until a backorder position of 5,400 units is reached. The cost of ordering is $ 400, the variable cost of production unit is $28, the annual cost of carrying the inventory is 18% annually, and the cost of backorder per missing unit per year is $ 7. Obtain the values for the following:
a) maximum inventory
b) average annual investment in the inventory
c) annual cost of maintaining inventory
d) annual cost of backorder
e) annual cost of ordering
f) fraction of time that the system is in backorder position
2. Sara, owner of a small bike shop, enters into a contract with ABC Company to purchase 10 bikes for 200.00 per bike for a total cost of $2,000.00. ABC. Company breaches the contract. Sara purchases the same bikes on the open market for a total cost of $3,000.00 ($300.00 per bike). If Sara sues ABC company, requesting compensatory damages, how much money will Sara receive?
a Nothing. She still received a great deal for the bikes.
b $750.00
c $1,000.00
d $2500.00
e $3,000.00
3. Jenny entered into a written contract to purchase a house on a hill in Lake Arrowhead. The owner, Roger Smith, breached the contract. Jenny sued, asking for specific performance of the contract. Will she be successful?
There is no rule regarding this issue.
No, she can only recover for money damages.
Yes, if the court finds that money damages are inadequate since land is unique.
No, because real estate is not unique.