The shortage model is usually difficult to estimate

Assignment Help Accounting Basics

Reference no: EM131106589

The penalty cost p used in the shortage model is usually difficult to estimate. As an alternative, a company might use a service-level constraint, such as, "95% of all demand must be met from on-hand inventory." Solve Problem 35 with this constraint instead of the $20,000 penalty cost. Now the problem is to minimize the total annual ordering and holding costs subject to meeting the service-level constraint

Reference no: EM131106589

Questions Cloud

Evaluate the meaning and adequacy of this evidence : What evidence is presented regarding the reliability of the NCTT? Evaluate the meaning and adequacy of this evidence.

What amount should balt report : On December 31, 2010, Ace had 250 shares of common stock outstanding and its book value per share was $50 - What amount should Balt report in its December 31, 2010 balance sheet as investment in Ace?

How much could sales have increased : Assuming that its fixed assets were operating at only 85% of capacity, by how much could sales have increased, both in dollar terms and in percentage terms, before NWC reached full capacity?

What is meant by term transmission models of communication : Briefly define what is meant by the term transmission models of communication

The shortage model is usually difficult to estimate : The penalty cost p used in the shortage model is usually difficult to estimate. As an alternative, a company might use a service-level constraint, such as, "95% of all demand must be met from on-hand inventory."

Charitable contributions expense : What amount of the above should be included in Yew's income statement as charitable contributions expense?

How do these issues affect field of psychological testing : What are at least two ethical issues associated with psychological testing? What impact do these issues have on the field of psychological testing?

Ordering audio cds at gmb with shortages allowed : Suppose that instead of measuring shortage in terms of cost per shortage per year, a cost of P dollars is incurred for each unit the firm is short. This cost does not depend on the length of time before the backlogged demand is satisfied.

Depreciation allowance percentages : What is the operating cash flow for year 3 given the following sales amounts and MACRS depreciation allowance percentages?

User Account

All Pages