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lozanna [386]
3 years ago
13

Demand for a specific design of dinning sets has been fairly large in the past several years and Statewide Furnishings, Inc. usu

ally orders new dinning sets 10 times a year. It is estimated that the ordering cost is $400 per order. The carrying cost is $50 per unit per year. Furthermore, State Wide Furnishings, Inc. has estimated that the stock out cost is $120 per unit per year. Based on forecast, the annual demand is 600 units. State Wide Furnishings, Inc. has 350 working days in a year and its lead time is 14 working days.
Assume shortage is allowed and the store manager is sure that shortages will not become lost sales, determine the annual ordering cost.
a. 592.82
b. 1472.01
c. 2051.28
d. 4116.11
e. None of the above
Business
1 answer:
Harlamova29_29 [7]3 years ago
8 0

Answer:

e. None of the above

Explanation:

Annual demand, D = 600 units

Ordering cost, S = $400

Holding cost, H = $50

Economic order quantity without stock-out = SQRT(2*D*S/H)

Economic order quantity without stock-out = SQRT(2*600*400/50)

Economic order quantity without stock-out = 98

Total annual ordering cost = (D/Q)*S + (Q/2)*H

Total annual ordering cost = (600/98)*$400 + (98/2)*$50

Total annual ordering cost = $2,448.97 + $2,450

Total annual ordering cost = $4,898.97

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Answer:

A. is paid by firms who​ can't directly monitor the work effort of their employees

Explanation:

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4 years ago
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