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2 years ago

9

Cooper Company has an average demand of 50 units per day. Lead time from the supplier averages 20 days. The combined standard de

viation of demand during lead time is 20 units. The item costs $75 and the inventory carrying cost is 24%. Answers to the next two questions are based on this information. How much is the annual inventory carrying cost of the safety stock because of this decision

1 answer:

Mashutka [201]2 years ago

5 0

Answer:

The annual inventory carrying cost of the safety stock = $594

Explanation:

Given that:

The average daily demand (d) = 50 units / day

The lead time (LT) = 20 days

The combined standard deviation of demand lead time = 20 units.

The item cost = $75

The inventory carrying cost = 24% of the item cost

i.e. (24/100) × 75 = $18 of the item cost

Let assume that the management of the company wants to offer a service level of 95%.

Then the z-value that relates to 95% confidence interval level = 1.65

So; the safety stock relating to the 95% service level = $z \times \sigma_{dlT}$

= 1.65 × 20

= 33 units

Now:

The annual inventory carrying cost of the safety stock = Safety stock × Inventory carrying cost.

= 33 × $18

= $594

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Arthur sells $100 worth of cotton to Bob. Bob turns the cotton into cloth, which he sells to Camille for $300. Camille uses the

kow [346]

Answer:

$1200

Explanation:

Gross Domestic Product (GDP) is the total market value of all of the final goods and services produced in a country over a particular period of time.

The contribution to GDP can be determined by adding the value created by each of the economic agents involved in the creation of the final goods and services

Arthur = 100 = 100

Bob = 300 - 100 = 200

Camille = 700 -300 = 400

Donita = 1200 - 700 = 500

Total Value 100 +200 +400 +500 = $1200.

You will observe that it is the same as the value of the final good i.e dress. In the production process, other goods involved are referred as intermediate goods

8 0

3 years ago

A firm has estimated the following demand function for its product:

Rom4ik [11]

Answer:

(i) Q=300

(ii) Elasticity of Demand=-3.33 (elastic)

(iii) Income Elasticity= 2.5 (normal good)

(iv) Advertising Elasticity: 1.5

Explanation:

The Demand function is given by

$Q=100-5P+5I+15A$

(1) To solve (i) we need to replace P = 200, I = 150, and A = 30 in the demand equation:

$Q=100-5(200)+5(150)+15(30)=300$

(2) To find the price elasticity (how much quantity demanded changes with price) we use the point price elasticity formula

$\eta_{Price}=\frac{\Delta Q}{\Delta P}\frac{P}{Q}$

From the above equation we get: $\frac{\Delta Q}{\Delta P}=-5$

Replacing in the elasticity formula

$\eta_{Price}=-5\frac{200}{300}=|-3.33|>1$

in absolute terms the elasticity is bigger than one so it is an elastic demand.

(3) For income elasticity (how much quantity demanded changes with income), we proceed similarly as above. But the derivative is respect to income

$\eta_{Income}=\frac{\Delta Q}{\Delta I}\frac{I}{Q}=5\frac{150}{300}=2.5>1$ [/tex]

Which is bigger than one, denoting this is a normal good because it's bigger than one.

(4) Advertising elasticity (how much quantity demanded changes with expenditures in advertising), we proceed as before

$\eta_{advertising}=\frac{\Delta Q}{\Delta A}\frac{A}{Q}=15\frac{30}{300}=1.5$

3 0

3 years ago

A sporting goods manufacturer budgets production of 48,000 pairs of ski boots in the first quarter and 39,000 pairs in the secon

professor190 [17]

Answer:

$831,600

Explanation:

The budget must account for all of the production of the first quarter and 20% of the production of the second quarter, the number of boots considered in the budget is:

$b= 48,000 +0.20*39,000\\b=55,800\ boots$

Assuming that each boot uses exactly 2kg of raw material and that the company has 19,200 kg on hand, the amount of raw material still required is:

$m = 2*55,800-19,200\\m=92,400\ kg$

If the cost per kg is $9, then the budgeted materials purchases cost for the first quarter is:

$C=92,400*\$9\\C=\$831,600$

The budgeted materials purchases cost is $831,600.

5 0

3 years ago

Mark is the manager of an american company. he expects the value of the british pound to appreciate in the near future. hence, h

Paladinen [302]

<span>Mark is using what is called a lag strategy. A lag strategy can be used when there is an intended change in payment in a foreign transaction. This usually occurs when there is an expected change occurring in exchange rates. The lag occurs when the transaction is delayed, which is what Mark is attempting to do here.</span>

3 0

3 years ago

This year Truckit reported taxable income of $160,000 and received $20,000 of municipal interest. Truckit paid $55,000 in entert

Lynna [10]

Answer: $76,400

Explanation:

GIVEN THE FOLLOWING :

TAXABLE INCOME = $160,000

MUNICIPAL INTEREST = $20,000

ENTERTAINMENT EXPENSE = $55,000

FUN.

CURRENT E&P = (taxable income + interest) - (expenses + Tax deduction).

CURRENT E&P = $160,000 + $20000 - (55000 + 15000 + (160,000*0.21))

CURRENT E&P = 160000 + 20000 - 55000 - 15000 - 33600)

THEREFORE CURRENT E&P = $76,400

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3 years ago