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vovangra [49]
3 years ago
12

Master Hatter's demand for hats is 25,000 per year. The order cost is $425 and the carrying cost is $4.50 per unit. The cost pai

d (price) to the hat manufacturer is $75 per hat.
A. Compute the Economic Order Quantity and enter it here.
B. The supplier has indicated that Master Hatter can have a price of $25 per hat if he orders at least 2000 at a time.
C. In order to minimize total costs (inventory plus purchase costs). Master Hatter should order blank hats and will save blank dollars each year.
Business
1 answer:
laiz [17]3 years ago
6 0

Answer with its Explanation:

<u>Part A.</u> Economic order quantity Computation

Economic order quantity can be calculated by using the following formula:

EOQ = Squaroot of (2* D * S / H)

Here

Ordering cost per order is $425 which is S

Annual Holding cost per unit per year is $4.5 which is H

Annual Demand is 25000 Units

By putting values, we have:

EOQ = (2 * 25000 * $425 / $4.5) ^(1 / 2) = 2173 Hats

<u></u>

<u>Part B.</u>

Total Cost at EOQ = Purchasing Cost + Total Ordering cost + Holding Cost

By putting values, we have:

Total Cost = 25,000 Units * $25 per unit + ($25,000 / 2173 Hats) * $425 + (2173 Hats / 2) * $4.5 = $634,778 Annual Cost

<u>Part C.</u>

For ordering at-least 2000 units per order, the total cost would be:

Total Cost under 2000 order quantity = 25,000 * $25 per unit   + (25000/2000) * $425 + (2000/2) * $4.5

Total Cost under 2000 order quantity = $634,813

By ordering at least 2000 hats will bring a loss of $35 ($634,778 - $634,813), hence Master Hatter must only order in EOQ.

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Explanation:

From the information given:

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The total production of computer games at this time = 3 × 30 = 90

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(b)

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This because the opportunity cost of 1 computer = 3 games

For two computers = 2 ×  3 games = 6 games

For three computers = 3 ×  3 games = 9 games  ... and so on.

(d)

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2 years ago
Having just returned from the war in Afghanistan, David has $25,000 in his savings account. His girlfriend suggests that he talk
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Answer:

The correct answer is FALSE.

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  • Second, high growth stock are also
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Although they are high risk, they also have great advantages such as:

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What can David do?

Subject to the advise of a professional investment professional

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w'(7,-4) indicates the reflection across y-axis. (x,y) is transformed to (-x,y). w(-7,-4) = w(7,-5).

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The rules for reflecting over the X axis is to negotiate the value of the y coordinate of each point and x is same.

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