1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
natta225 [31]
3 years ago
8

The annual demand for a product has been projected at 2,000 units. This demand is assumed to be constant throughout the year. Th

e ordering cost is $20 per order, and the holding cost is 20 percent of the purchase cost. Currently, the purchase cost is $40 per unit. There are 250 working days per year. Whenever an order is placed, it is known that the entire order will arrive on a truck in 6 days. How many units should the company order each time an order is placed if the company wishes to minimize total inventory cost?
Business
1 answer:
Mumz [18]3 years ago
8 0

Answer:

The company should order 100 units to minimize total inventory cost.

Explanation:

Given,

Annual Demand, D = 2,000 units

Order cost, S = $20

Purchase cost = $40

Holding cost, H = Purchase cost x percentage of holding cost

Holding cost = $40 × 20%

Holding cost = $8

We know, the company should order the highest number of products with a minimum cost, and for that, the company uses economic order quantity. Hence,

Economic Order Quantity (EOQ) = \sqrt\frac{2*D*S}{H} }

EOQ = \sqrt \frac{2*2,000*20}{8}

EOQ = \sqrt{10,000}

EOQ = 100

You might be interested in
Ace Deliveries, a courier service provider, built a strong reputation over a short period of six months. Inundated with customer
marysya [2.9K]

Answer:

both revenue-oriented and operations-oriented

Explanation:

revenue-oriented pricing can be understood the strategic price level that the producers set to maximize the amount of profit they earn. As it can be seen from the given passage, the company starts noticing more about the earnings, so that they decided to cut down on the discount offering to the customers and set higher price. By that, it can help raise the revenue of the company.

Meanwhile,  operations-oriented pricing is price strategy that the company adopts to optimize productive capacity as well as the efficiency of the manufacturing procedure. This is indicated in the actions of expanding fleet of vans and enlarge delivery networks of the company to raise the productivity.

6 0
3 years ago
State the effect (cash receipt or payment and amount) of each of the following transactions, considered individually, on cash fl
Ivanshal [37]

Answer:

    Effect of Transaction on Cash Flows

     Effects                     Amount

1.   Cash Payment         $239,000

2.  Cash Receipt           $252,000 (12000*$21)

3.  Cash Receipt           $91,400

4.  Cash Payment         $491,000

5.  Cash Payment         $86,000

6.  Cash Receipt           $188,100 (190,000*0.99)

7.  Cash Payment         $353,400 (6,200*$57)

8.  Cash Payment         $36,100 [1.90*(23,000-4,000)]

5 0
3 years ago
As a manager for your company some of your responsibilities include measuring metrics and overseeing company strategies. You obs
Ilya [14]

Answer:

The primary reason for the large increase in productivity would be the management factor.

Explanation

An important factor that affects the productivity in a company is the management that can have a great influence as good managers that are competent, make a good use of the resources, implement good strategies and develop good relationships with employees generating a good working environment help increase the productivity. According to the question, this is the main reason that can be inferred.

8 0
3 years ago
Billy accepted a job at a company that specializes in providing money for short-term retail lending. where did he go to work?
Harlamova29_29 [7]
A credit card company
3 0
3 years ago
Suppose you've just inherited $66,000 from your rich Aunt. You're trying to decide whether to keep the $66,000 in cash so that y
Flauer [41]

Answer:

Opportunity cost of holding the money = $1.650

Explanation:

Opportunity cost is the value of the next best alternative sacrificed in favour of a decision.

The opportunity cost of holding the money is the interest on deposit that would be have been earned should it be invested at the savings rate.

Interest on savings deposit = interest rate × deposit

                                         = 2.5%× 66,000= $1,650

Opportunity cost of holding the money = $1.650

3 0
3 years ago
Other questions:
  • See Table 2.5 LOADING... showing financial statement data and stock price data for Mydeco Corp. Suppose Mydeco had purchased add
    8·1 answer
  • George recently purchased a computer from HardDigits Inc., a firm that sells assembled desktop computers and other electronic pr
    8·1 answer
  • How did the rise of big business in the united states transform the economy and affect the lives of working people?
    11·1 answer
  • A written promise to pay certain sum of money to another person or company is a
    5·2 answers
  • Jillian has just started her first job with a $45,000 salary at a company with a 401(k) plan that has a 100% match up to 3% gros
    13·1 answer
  • The lower the ___, the less interest you will pay.
    11·1 answer
  • The following data were gathered to use in reconciling the bank account of Photo Op. Company: Balance per bank $ 14,400 Balance
    12·1 answer
  • Talia’s Tutus bought a new sewing machine for $55,000 that will be depreciated over 5 years using double-declining-balance depre
    10·1 answer
  • Assume that you hold a well-diversified portfolio that has an expected return of 11.0% and a beta of 1.20. The total value of yo
    12·1 answer
  • The following is an example in which the proposed method is applied to a fixed asset with an original cost of $248,000, an estim
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!