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.
Managerial Finance Functions Require skilful execution, control and planning of financial activities. Hence there are four significant managerial finance functions. Such are
Charleston Industrial revised its dividend policy and decided that it wants to maintain a retained earnings account of $1 million. The company''s retained earnings account at the e
Payback Period Method - Traditional Methods This method gauges the viability of a venture via taking the outflows and inflows over time to ascertain how soon a venture can pay
Important Points for Shareholders and Creditors 1. In raising capital, the borrowing firm will constantly question the financial securities in form of preference shares
BalanceSheet format
blah blah
what is mobile computing
Agency Theory An agency relationship arises whether one or more parties identified the principal contracts or hires another identified an agent to perform on his behalf some
Advantages of Using Debt Finance Interest on debt is a tax permit able expense and as that it is reduced via the tax allowance. The cost of debt is fixed regardless of
Weighted Average Cost of Capital Weighted Average Cost of Capital or WACC is also called the overall or composite cost of capital. Since various capital components have diffe
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