Harvey Automobiles uses a standard part in the manufacture of several of its trucks. The cost of producing 60 comma 000 parts is
$ 160 comma 000, which includes fixed costs of $ 70 comma 000 and variable costs of $ 90 comma 000. The company can buy the part from an outside supplier for $ 3.00 per unit, and avoid 30% of the fixed costs. If Harvey Automobiles makes the part, how much will its operating income be?
The steps for finding the EOQ in a quantity discount model with variable H are:
The optimal point is the quantity that yields the lowest cost
Start with the lowest price
If the minimum point is feasible
Otherwise, compare total costs
What is the Economic Order Quantity(EOQ)?
The Economic Order Quantity is the ideal quantity of units a company should purchase to meet demand while minimizing inventory, costs such as holding costs, shortage costs, and order costs.
The economic order quantity formula assumes that demand, ordering and holding costs all remain constant.
An externality in business or economics is where an industrial activity has an unexpected side effect which does not figure in the cost of the goods and services involved. For example, I worked many years at a large mine. Just the existence of the mine there meant it was a no-hunting area so a side effect was that the moose used it as a refuge during hunting season which as a side effect was beneficial to the moose (and deer). Another example is that we used to crush mine rock for the haulroads for winter traction. As a result, it was found that the fines from this were concentrated with copper values so were put in the mill for processing-an unexpected outcome.
The answer to this question is <span>Company strengths and weaknesses. In this context, company strength refers to all the factors that make the company stand out among other competitors in the market (such as good products, fame, good researchers, etc) The weakness, on the other hand, refers to something that needed to be taken care of if the company want to win the competition in the market. (such as huge debt ratio, scandals, etc)