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.
The Audiology Department at Randall Clinic offers many services to the clinic’s patients. The three most common , along with cost and utilization data, are as follows: Service Var
Legal Rules - Factors Influencing Dividend a) Net purchase rule States that dividend may be paid from company's profit either past or present. b) Capital impairment r
State the Classification of New Issue Market New market can be categorized as: (i) A market where firms go to the public for the first time through initial public offerin
discuss the flow of fund in an open economy
Debenture Finance A type of long term debt raised after a company sells debenture certificates to the holder and raises finance in return. The term debenture has its source fr
Matching Approach - Financing Current Assets This approach is further referred to as the hedging approach. Beneath this approach, the firm adopts a financial plan that involve
Question 1: (a) (i) What are Asset shares? (ii) State the purpose of calculating Asset shares. (b) Outline the five uses of policy Asset shares? (c) Lif
Financial Intermediaries These are institutions that link or mediate between the investors and savers: Some examples of financial intermediaries are as follow: 1. Comme
what are the main function of the derivative market
Public Limited Companies These are joint stock companies that have sold shares to specific public and thus have attracted public money in form of share capital. Those compani
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