What is the economic order quantity

Assignment Help Business Management
Reference no: EM132073542

Retailers Warehouse (RW) is an independent supplier of household items to department stores. RW attempts to stock enough items for a 90 percent service probability.

A stainless steel knife set is one item it stocks. Demand (2,200 sets per year) is relatively stable over the entire year. Whenever new stock is ordered, a buyer must assure that numbers are correct for stock on hand and then phone in a new order. The total cost involved to place an order is about $11. RW figures that holding inventory in stock and paying for interest on borrowed capital, insurance, and so on, add up to about $7 holding cost per unit per year.

Analysis of the past data shows that the standard deviation of demand from retailers is about four units per day for a 365-day year. Lead time to get the order is seven days.

What is the economic order quantity? (Round your answer to the nearest whole number.)

What is the reorder point? (Use Excel's NORMSINV() function to find the correct critical value for the given ?-level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.)

Reference no: EM132073542

Questions Cloud

Comparing several solutions using the same criteria : A yardstick report is appropriate when comparing several solutions using the same criteria. Describe a situation in which a yardstick report would be appropriat
What is the effective rate of interest on the bank loan : The Reynolds Corporation buys from its suppliers on terms of 2/19, net 50. Reynolds has not been utilizing the discounts offered and has been taking 50 days.
The course of business can be divided into two categories : The money that a business spends in the course of business can be divided into two categories:
What is the pure bond value of the convertible bond : If similar bonds, which are not convertible, are currently yielding 10 percent, what is the pure bond value of this convertible bond?
What is the economic order quantity : What is the economic order quantity? (Round your answer to the nearest whole number.)
What is crew cut operating cash flow : What is Crew Cut's operating cash flow, investment in operating capital and free cash flow for 2008, respectively in millions?
Calculate the stock price if the company decides to use cash : Rexton Oil is an all-equity firm with 1000 million of shares outstanding. Rexton currently has a cash flow of $450 Million of USDs and expects future free cash.
Twitter culture the study of organizing : Twitter Culture The study of organizing, the second of the four functions in the management process, begins with the study of organizational culture
Find what is the initial investment in the product : If the plant and equipment are depreciated over 4 years to a salvage value of zero using straight-line depreciation, and the firm's tax rate is 30%.

Reviews

Write a Review

Business Management Questions & Answers

  Global pharmaceutical industry

Identify the main environmental forces which affect the global pharmaceutical industry and use scenario planning techniques to consider the key drivers of change that will affect the global pharmaceutical industry in the future.

  Traditional managed care approaches

Describe fee-for-service plans, traditional managed care approaches, and more recent consumer-driven approaches to providing health care coverage.

  Global business information technology considerations

Today, many more organizations leverage worldwide opportunities by becoming global organizations. Going global opens doors to markets and services

  What is the optimal mix

(i) What is the optimal mix? (ii) What is the firm's output elasticity and returns to scale? Explain.

  Evolution in the economic development process

As a country progresses from one economic stage to another, what are some of the marketing effects? Illustrate this evolution with a foreign country.

  How can you apply lewin change theory

How can you apply Lewin's change theory (3 stages) if you will form a new hospital committee that involve patient/family members?

  What is the difference between a wbs and an activity

What is the difference between a WBS and an activity?

  Prepare your conclusions regarding the significance of model

Prepare your conclusions regarding the significance of those models in business. How might they apply? Format your assignment consistent with APA guidelines.

  Role to play in environmental management

Entrepreneurs-businessmen have a role to play in environmental management. Share an example of a company that failed to implement environmental management plans and policies while rolling out a new product(s) and/or service(s).

  Contingency planning layers

In an organization like International Produce, which was the focus of the unit assignment, having an incident involving highly valuable corporate data.

  Develop and discuss the main points of your sources

Develop and discuss the main points of your sources. Link your information to key concepts from the course text.

  Balance the need to reform with border protection

When it comes to immigration laws, how should we balance the need to reform with border protection?

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