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Marina86 [1]
3 years ago
15

A manufacturing company uses 1000 non-returnable special pins a month, which it purchases at a cost of $2 each. The manager has

assigned an annual holding cost of 20 percent of the purchase price per pin. Ordering cost is $40 per order. Currently the manager orders 500 pins at a time. How much could the firm save annually in ordering and holding costs by using the EOQ? (Round the final answer to 2 decimal places.) 309.83 619.68 676.15 728.34 None of the above
Business
1 answer:
zloy xaker [14]3 years ago
3 0

Answer:

Total amount of be saved = $180- $178.8 =$1.11

Explanation:

<em>To determine the amount of savings , we will subtract the total inventory cost under the current order size of 500 units from the total cost using the EOQ.</em>

EOQ is the oder quantity that minimizes carrying cost and ordering cost.

Total cost of the current order size of 500 unit

Currently the total cost = Annual ordering cost + Annual holding cost

 <em>Annual ordering cost= (Demand/order size) × Ordering cost per order</em>

                               =(1000/500) × $40 = $80

<em>Carrying cost = holding cost per unit per annum × order size/2</em>

                      = 20% × $2 ×  (500/2)= $100

Total cost =80+ 100 = $180

Total cost using EOQ

EOQ is calculated as follows:

EOQ = (2× Co D)/Ch)^(1/2)

Co- ordering cost Ch - holding cost, D- annual demand

EOQ = √(2× 40×1000/20%×2

EOQ = 447.21 units

Total cost of inventory

Ordering cost = (1000/447.21)×40 = 89.4427191

Holding cost =  (447.21/2) * 20% × 2=  89.4427191

Total cost =89.44 + 89.44 = 178.8

Total amount of be saved = $180- $178.8 =$1.11456

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<h3>What is ethics?  </h3>

Ethics is a term that refers to moral philosophy. This focuses on the study of human behavior based on right and wrong according to duty. Contemporary ethics is usually divided into three branches which are:

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Note: The question is incomplete because the information is missing. Here is the complete information:

Case study 4

A woman is sexually harassed by a top-level senior executive in a large company. She sues the company, and during settlement discussions she is offered an extremely large monetary settlement. In the agreement, the woman is required to confirm that the executive did nothing wrong, and after the agreement is signed the woman is prohibited from discussing anything about the incident publicly. Before the date scheduled to sign the settlement agreement, the woman's lawyer mentions that she has heard the executive has done this before, and the settlement amount is very large because the company probably had a legal obligation to dismiss the executive previously. The company however wants to keep the executive because he is a big money maker for the company.

What are the issues of integrity, ethics and law posed in the case study? What options does the woman have, and what should she do and why?

Lecturer Guidelines

Some of the issues raised by this case study include initial issues of unethical and unlawful conduct, by the executive and the company; whether the company should allow the executive to continue working because of the revenue he generates, in view of his propensity to harm co-workers, and whether this action is ethical or reflects integrity; whether the company should require the woman to state that the executive did nothing wrong as part of the settlement agreement; whether the woman should agree to this settlement in view of the harm future employees are being exposed to; and whether the woman is prioritising justice for herself over harm to future employees in an acceptable way.

Learn more about ethics in: brainly.com/question/2630782

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