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.
Sources of Funds - Finance Venture capital, with combining risk financing along with marketing assistance and management, could become an effective instrument in fostering dev
Conditions for Lease Finance Lease finance is ideal within the following circumstances: a) Whenever the asset depreciates faster. b) Whenever the asset is matter to obso
Routine functions - Finance Function For the effective execution of the managerial finance functions, schedule functions have to be performed. These decisions relate systems
Determine how much of a total loan payment applies towards principal and how much applies towards interest for a home mortgage of $177,219 with a fixed APR of 7.5% of 20 years
defect of traditional defect
Significant Features of Partnership 1) The capital is contributed by the partners and no appeal is made to the public. 2) Like the sole proprietorship, a partnership has a l
Timing of Investment a Stock Exchange The ideal way of creation profits on the stock exchange is to buy on the bottom of the market or lowest M.P.S and sell at the top of the
One of the projects the US loan would fund is to build earthquake-resistant buildings. The project will begin in March 2013, last for two years and is expected to have the followin
Explain the Baumol Model
Bases of Share Valuation Share valuation can be done on the basis of income and asset values. On the basis of income still a share will be entitled to two forms of income. For
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