Eoq model with quantity discounts, Managerial Accounting

Assignment Help:

EOQ Model with quantity discounts

Circumstances frequently occur where firms are able to obtain quantity discounts for large purchase orders. Buying in bulkiness has some merits and demerits.

Advantages:

(i) A saving in purchase rule decreases in unit cost, which consists of the total amount of discount for the period.

(ii) A reduction in the total ordering costs because fewer orders are placed to take advantages of the discounts.

Disadvantages:

Increased holding cost arising from higher stock levels when large quantities are purchased. Like:

•    Stock out cost
•    Insurance
•    Deterioration
•    Security etc.


Related Discussions:- Eoq model with quantity discounts

Value added statements, VALUE ADDED STATEMENTS Are intended to show how...

VALUE ADDED STATEMENTS Are intended to show how much wealth or value has been created by the company’s operations and how the wealth has been shared out to interested groups e.

Problrm question, The std cost of chemical mixture~PQ is as follows: 40% of...

The std cost of chemical mixture~PQ is as follows: 40% of material P @rs.400/kg 60% of material Q @rs.600/kg A std loss of 10% is normally anticipated in pdn. The followinng parti

Cost concept, Cost concept . techniques of costing . absorption costing

Cost concept . techniques of costing . absorption costing

Optimum solution, Optimum Solution From the stand point of implementing...

Optimum Solution From the stand point of implementing the LP solution, the mathematical classification of the variables as basic and non-basic is of no importance and should be

International transfer pricing, International Transfer pricing Internat...

International Transfer pricing International transfer pricing refers to the determination of prices to be charged between related persons and in particular within a multination

Transfer pricing , Western States Supply, Inc. (WSS), consists of three div...

Western States Supply, Inc. (WSS), consists of three divisions—California, Northwest, and Southwest—that operate as if they were independent companies. Each division has its own sa

Selective inventory management, Selective Inventory Management The inve...

Selective Inventory Management The inventory of an industrial firm generally comprises thousands of items with diverse prices, usage and lead time, as well as procurement and/o

Xs strategy, X's Strategy X will like to divide his play between his ro...

X's Strategy X will like to divide his play between his rows in such a way that his expected winnings or losses when Y plays the first column will be equal to his expected winn

Budget, You recently began a job as an accounting intern at Indoor Racing L...

You recently began a job as an accounting intern at Indoor Racing Ltd. Your first task was to help prepare the cash budget for February and March. Unfortunately, the computer with

Write Your Message!

Captcha
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