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Lubov Fominskaja [6]
3 years ago
8

Ye’ Olde Barrel Shop sells oak barrels to a local winery. The Master Cooper would like to reduce her oak lumber inventory by d

etermining the optimal number of oak boards to order. The annual demand averages 55,000 boards and the order cost is $21.00 per order. Holding cost is estimated to be 40%. The purchase cost of each board is $14.00. The standard deviation of daily demand is 5 boards. The standard deviation of lead time is 3.0 days. Assume 268 days in the year and an average lead time of 7 days.
What is the EOQ?

If a service level of 98% is desired during the reorder interval, what is the reorder point? Remember you cannot order partial units. To avoid rounding errors, round to the nearest integer in the LAST step.
Business
1 answer:
mihalych1998 [28]3 years ago
7 0

Answer:

The EOQ is 642

The reorder point is 2,699

Explanation:

In order to calculate the EOQ we would have to calculate the following formila:

EOQ=√2DS/H

According to the given data we have the following:

D = 55,000

S = 21

H=40%*purchase cost

H=0.4*14 = 5.6

Therefore, EOQ=√(2*55,000*21)/5.6

EOQ=642

To calculate the reorder point If a service level of 98% is desired during the reorder interval, we would have to use the following formula:

reorder point=dL+z√σ∧2dL+σ∧2Ld∧2

reorder point=(7*205.22)+√(2.05*√(5∧2*7)+(3∧2*205.22∧2)

reorder point=2,699

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Answer:

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8 0
3 years ago
Suppose the price of apples doubles to $3.00 between year 1 and year 2 but that nothing else in the economy changes Instructions
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Answer:

1. Suppose Quantity of Apple sold in year one & two =  100Kg.

Price in year 1 = $1.50 per kg

Price in year 2 = $3.00 per kg

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Nominal GDP year 2 = 3*100 = $300

Change in Nominal GDP = $150

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b. Real GDP of year 1 = Nominal GDP of year 1 = $150

Real GDP of year 2 = 1.50*100 = $150

Change in Real GDP = 0%

2. Quantity of Bread = 100 units price = $ 1 per unit, year 2 price = $ 2 per units

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Nominal GDP year 2 = 2*100+3*100 = $500

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6 0
2 years ago
Which of the following statements is false?
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This test that albert chong and his colleagues carried out was most relevant for evaluating the
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3 years ago
Head-First Company plans to sell 5,800 bicycle helmets at $76 each in the coming year. Unit variable cost is $44 (includes direc
Romashka [77]

Answer:

1. 4,350 helmets

Explanation:

1. The computation of the number of helmets is shown below:

= (Total fixed cost + operating income) ÷ (Contribution margin per unit)

where,  

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Less: Variable cost  (4,350 × $44)                  ($191,400)

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Less: Total Fixed cost                                     ($49,600)

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