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marta [7]
3 years ago
5

JL.53 Bob's Bumpers has a repetitive manufacturing facility in Kentucky that makes automobile bumpers and other auto body parts.

The facility operates 360 days per year and has annual demand of 77,000 bumpers. They can produce up to 350 bumpers each day. It costs $88 to set up the production line to produce bumpers. The cost of each bumper is $129 and annual holding costs are $39 per unit. Setup labor cost is $20 per hour.
(a) Based on the above information, what is the optimal size of the production run for bumpers? display answer to two decimal places
(b) Based on your answer to the previous question and assuming the manufacturer holds no safety stock, what would be the average inventory for these bumpers?
(c) Based on your answer two questions back, how many production runs would be required each year to satisfy demand?
(d) Suppose the customer (an auto manufacturer) wants to purchase these bumpers in lots of 500 and that bob's bumper is able to reduce setup cost to the poi t where 500 is now the optimal production run quantity. how much will they save in annual holding cost with this new lower production quantity?
(e) How much will they save in annual set up costs with this new lower production quantity?
Business
1 answer:
Strike441 [17]3 years ago
6 0

Answer:

a)

Annual demand = 75000 = D

S = ordering cost/set up cost = $53

d = daily demand = 75000/250 = 300

h = holding cost per unit per year = $25

p = Daily production rate = 320

optimal size of the production run =EPQ = sqrt((2*D*S)/(h*(1-(d/p))))

= sqrt((2*75000*53)/(25*(1-(300/320))))

= 2255.659549 = 2255.66 (Rounded to 2 decimal places)

b)

maximum inventory = EPQ*(1 - (d/p))

= 2255.66*(1 - (300/320))

= 140.97875

Avergae inventory = 140.97875/2 = 70.49

c)

Number of production runs = Annual demand/EPQ = 75000/2255.66 = 33.25

d)

Holding cost with EPQ = 2255.66 = 70.49*25 = 1762.25

With EPQ = 500, maximum inventory = 500*(1 - (300/320)) = 31.25

Holding cost with EPQ = 500, holding cost (31.25/2)*25 = 390.625

Savings = 1762.25 - 390.625 = 1371.625

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Assume that Corn Co. sold 7,500 units of Product A and 2,500 units of Product B during the past year. The unit contribution marg
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Answer:

Break-even point (units)= 8,464 units

Explanation:

Giving the following information:

Assume that Corn Co. sold 7,500 units of Product A and 2,500 units of Product B during the past year. The unit contribution margins for Products A and B are $33 and $56, respectively. Corn has fixed costs of $328,000.

First, we need to calculate the proportion of sales:

Product A= 7,500/10,000= 0.75

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Now, using the following formula, we can determine the break-even point in units:

Break-even point (units)= Total fixed costs / Weighted average contribution margin

Break-even point (units)= 328,000/ (0.75*33 + 0.25*56)

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8 0
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After an oil spill off the California coast, the ladies’ aide society of Cedar Rapids , Iowa , raised money to send to voulentee
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Answer:

The tax deduction of the contributions.

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The claiming of tax deduction of all money raised for the natural disaster in California. Since the Ladies Aid Society is presumably, a non-profit organization then its contributors may claim tax deduction, on their contributions according to Iowa State.

3 0
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A depositor places $10,000 in cash in a commercial bank, where the required reserve ratio is 10 percent. The bank sends the $10,
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Answer:

C) $10,000, $1,000, and $9,000, respectively.

  • actual reserves increase by $10,000
  • required reserves increase by $1,000
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Explanation:

the money deposited by the client = $10,000

bank's reserve ratio is 10% = $10,000 x 10% = $1,000

since the bank kept the whole $10,000 as reserves, then:

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The bank is only required to keep $1,000 in reserves, this means it can borrow the remaining $9,000 whenever they want.

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A decrease in the demand for eggs due to changes in consumer tastes, accompanied by a decrease in the supply of eggs as a result
Mariana [72]

Answer:

a decrease in the equilibrium quantity of eggs; the equilibrium price may increase or decrease

Explanation:

Here are the options

a decrease in the equilibrium quantity of eggs and no change in the equilibrium price.

a decrease in the equilibrium quantity of eggs; the equilibrium price may increase or decrease.

a decrease in the equilibrium price of eggs; the equilibrium quantity may increase or decrease.

a decrease in the equilibrium price of eggs and no change in the equilibrium quantity.

Only a change in the price of a good leads to a movement along the demand curve of that good. Also, only a change in the price of the good would lead to an increase or decrease in the quantity demanded of that good.

Other factors other than the change in the price of the good would lead to a shift of the demand curve. Some of those factors include :

1. a change in consumers' expectation

2. a change in the taste of consumers

3. a change in income

A change in price of a good leads to a movement along the supply curve and not a shift of the supply curve.

Other factors other than a change in the price of the good would lead to a shift of the supply curve. Such factors include :  

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2. A change in the number of suppliers  

3. Government regulations  

A decrease in the demand for eggs would lead to a leftward shift of the demand curve for eggs. Price and quantity would fall as a result.

a decrease in the supply of eggs would lead to a leftward shift of the supply curve for eggs. Price would increase and quantity would fall.

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