Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Example of EOQ Assumptions
ABC Ltd requires 2,000 units of a component in its manufacturing method in the coming year that costs of Sh.50 each. The items are obtainable locally and the lead-time in one week. Each order costs of Sh.50 to prepare and process whereas the holding cost is of Shs.15 per unit per year for storage plus 10 percent opportunity cost of capital.
Required
a) How many units must be ordered each time an order is located to minimize inventory costs?
b) What is the reorder level?
c) How many orders will be located per year?
d) Find out the total relevant costs.
Suggested Solution:
a)
Where : D = 2,000 units
Co = Sh.50
Cn = Sh.15 + 10% x 50 = Sh.20
L = 7 days
b) R = DL/360
= (2,000 * 7)/360
= 39 units
c) Number of orders = D/Q
= 2,000/100
= 20 orders
d) TC = ½QCn + (D/Q) * C0
= ½(100)(20) + (2,000/100) * 50
= 1,000 + 1,000
= Sh.2,000
Beneath the basic EOQ Model the inventory is permitted to fall to zero just before another order is acknowledged.
What is Nominal and Real Return While nominal return is the return in nominal rupees, real return is equal to the nominal return adjusted for changes in prices i.e. rate of
SCENARIO You have just moved out of home and have a part-time job that pays you $18 per hour after tax (you work 20 hours a week). You also have $5000 in a savings account. You
After carefully reading all the available information, prepare a two page (double-spaced) essay and answer the following questions: Assume that we have the following data: C=100+0.
The operating income of H Ltd amounts to Rs. 186000. It pays 35% tax on its income. Its capital structure consists of the following: 14% Debentures
what do you consider to be the main inbound logistics for banking
Contracting Cost - Agency Costs These are costs acquired in devising the contract between the shareholders and managers. The contract is drawn to ensure management act in t
Internal finance can avoid the agency costs of debt and equity finance. In practice it is the most important source of funding. (a) Discuss potential problems of internal financ
What are the significant points of Fiscal Policy? Significant points of Fiscal Policy: a. Meaning of fiscal policy and why this is an significant tool into managing economic
Financial management is very important for any organization as at the end what does matter is the money. An effective financial management is of high importance for ensuring the be
what is the price of the share net sales Rs.120lakhs net profit margin 12.5% no. of equity shares 25,000 cost of equity shares 12% retention ratio 40% rate of interest(ROI) 16%
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd