What are chicagoland annual inventory related costs

Assignment Help Operation Management
Reference no: EM132952475

Chicagoland Sweets is a commercial baker that provides baked goods such as cookies and muffins to a number of coffee houses and snack bars around the Chicago area. Flour is an ingredient to many of their products so they use it at a fairly constant rate. They currently follow a policy of ordering 16,000 pounds every four weeks. (That is equivalent to 20 days since Chicagoland Sweets operates 5 days per week and roughly 250 days per year.) Their supplier sells flour in 50 pound bags at a price of $20 per bag. Chicagoland's management estimates that it cost $64 every time that they place an order for flour. Their cost of capital is 25% per year.

a) What are Chicagoland's annual inventory related costs (both holding and ordering) under their current policy? What are their inventory costs per unit sold (i.e., total inventory cost divided by the demand rate)? Can you suggest a better policy?

Reference no: EM132952475

Questions Cloud

Summarize the company primary products and or services : Write a 4-5 page evaluation of your chosen company's performance with respect to its stated values. Summarize the company primary products and or services
Allocate the joint cost of producing magna and delta : At split-off, Magna can be sold for $5 per pound, Allocate the joint cost of producing Magna and Delta ore using the relative sales value method.
Which of the statements regarding agency costs is true : Which of the statements regarding agency costs is true? They can be reduced by offering ownership in the form of common shares to corporate managers.
Find what is the company wacc for huntington power co : 23,000 5.1 percent coupon bonds outstanding, $2,000 par value, 22 years to maturity, What is the company's WACC for Huntington Power Co?
What are chicagoland annual inventory related costs : Chicagoland Sweets is a commercial baker that provides baked goods such as cookies and muffins to a number of coffee houses and snack bars around the Chicago ar
Which would tend to decrease a firm weighted average cost : Which would tend to decrease a firm's weighted average cost of capital, all else being equal? Increasing the use of equity financing relative to debt financing.
Diversity matrix in bell canada ecterprises inc : Elaborate the strengths and weaknesses of the diversity matrix in Bell Canada Ecterprises Inc.
What price would they expect each bond to sell : If AK sold bonds, at what price would they expect each bond to sell? AK is a publicly traded company with a solid credit rating, good management team
Major damage to the reputation of an organization : Explain a minimum of 2 credentialing issues that can impact quality outcome and cause major damage to the reputation of an organization.

Reviews

Write a Review

Operation Management Questions & Answers

  Book review - the goal

Operations Management is about a book review. Title of the book is "Goal". This book has been written by Dr. Eliyahu Goldartt. The book has been appreciated by many as one of those books which offers an insight into the operations and strategic capac..

  Operational plan in hospitality enterprise

Operational plan pertaining to a hospitality enterprise is given in detail in the solution. The operational plan is an important plan or preparation which gives guidelines regarding the role and responsibilities of each and every operation at all lev..

  Managing operations and information

Recognise the importance of a strategic approach to the development and deployment of organisational information systems. Demonstrate an understanding of the importance of databases and their integration to the organisation's overall information mana..

  A make-or-buy analysis

An analysis of the holding costs, including the appropriate annual holding cost rate.

  Evolution and contributor of operations management

Briefly explain Evolution and contributor of Operations management.

  Functions and responsibilities of an operations manager

A number of drivers of change have transformed the roles, functions and responsibilities of an operations manager over recent years. These drivers have not only been based on technological innovations but also on the need for organisations to develop..

  Compute the optimal order quantity

Compute the Optimal Order quantity of DVD players. Determine the appropriate reorder point.

  Relationship to operations practice in the organisation

Evaluate problems in operations and identify approaches to overcoming them. Critically evaluate operating plans and identify areas for improvement. Justify, implement and evaluate changes to operations in line with modern approaches.

  A make or buy analysis

Develop a report for Figi Fabricating that will address the question of whether the company should continue to purchase the part from the supplier or begin to produce the part itself.

  Prepare a staffing plan

Prepare a staffing plan showing the change of your unit from medical/surgical staffing to oncology staffing.

  Leadership styles in different organizations

Ccompare the effectiveness of different leadership styles in different organizations

  Risk management tools and models

Be able to understand the concept of risk, roles and responsibilities for risk management and risk management tools and models.

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!

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