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tensa zangetsu [6.8K]
3 years ago
14

If your company had an annual purchase cost of items equal to $2,000,000, an annual holding cost of $150,000 and an annual order

ing cost of $750,000 this scenario would reveal that:a. Nothing because there is insufficient information to discern where the EOQ would be. b. Your fixed lot size was lower than the EOQ c. Your fixed lot size was equal to the EOQ d. Your fixed lot size was higher than the EOQ.
Business
1 answer:
sveticcg [70]3 years ago
5 0

Answer:

c. Your fixed lot size was equal to the EOQ.

Explanation:

At economic order quantity, the Holding cost is equal Ordering cost . Since Holding cost is higher than the Ordering cost, less number of orders are placed and more inventory is being stored.

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Janelle Heinke, the owner of Ha'Peppas!, is considering a new oven in which to bake the firm's signature dish, vegetarian pizza.
NikAS [45]

Answer:

a) Oven A  = 1,667; Oven B = 2,353 pizzas.

b) Oven A

c) Oven A

d) 13,334 pizzas

Explanation:

Since nothing was mentioned regarding her time availability, the capacity of each oven will not be taken into account.

The income equation for ovens A and B, respectively, are:

A=(14-2)x-20,000\\B=(14-1.25)x-30,000

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a) The break-even occurs when income is zero:

A=0=(14-2)x-20,000\\x_A=1,666.66\\B=(14-1.25)x-30,000\\x_B=2,352.94

Rounding up to the next whole pizza, the break-even for oven A is 1,667 pizzas and for oven B it is 2,353 pizzas.

b) For x = 9,000:

A=(14-2)*9,000-20,000\\A=\$88,000\\B=(14-1.25)*9,000-30,000\\B=\$84,750

Income is greater with oven A, so Janelle should use oven A.

c) For x = 12,000

A=(14-2)*12,000-20,000\\A=\$124,000\\B=(14-1.25)*12,000-30,000\\B=\$123,000

Income is greater with oven A, so Janelle should use oven A.

d) She should switch ovens at the value for 'x' that causes B to be greater than A:

A

Rounding up to the next whole pizza, she should switch ovens at a volume of 13,334 pizzas.

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