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
bija089 [108]
3 years ago
6

A small manufacturing firm uses roughly 3400 pounds of chemical dye a year. Currently the firm purchases 300 pounds per order an

d pays $3 per pound. The supplier has just announced that order of 1000 pounds or more will be filled at a price of $2 per pound. The manufacturing firm incurs a cost of $100 for each time it submits an order and assigns an annual holding cost of 17 percent of the purchase price per pound. Determine the order size that will minimize the total cost. (enter answer in pounds with no decimal)
Business
1 answer:
kupik [55]3 years ago
6 0

Answer:

Consider the following calculations

Explanation:

First calculate the Economic Order Quantity (EOQ) ignoring the discount.

Economic Order Quantity (EOQ)= √ (2DS/H)

D- Demand per year= 3400 pounds

S- Ordering cost per year= $100

Per unit cost= $3 per pound

H- Holding (carrying) cost per unit per year=$0.51( 17% of purchase price)

So by applying the above formula, we get the following answer:

EOQ= SQRT (2*3400*100/0.51)= 1154.70 units

Economic Order Quantity (EOQ)= 1154 units

Discounted Order Quantity (DOQ) = 1500 units

Annual Orders under EOQ = Demand ÷ EOQ = 3400 ÷ 1154 = 3 orders

Annual Orders under DOQ = Demand ÷ DOQ = 3400÷ 1500 = 2.40 or 3 orders

Average Inventory under EOQ = EOQ ÷ 3 = 1154 ÷ 3 = 384.90 units

Average Inventory under DOQ = DOQ ÷ 3 = 1500 ÷ 3 = 500 units

A-Saving from reduction in Price

= Demand × Full Price × Discount Rate

= 3400× 3 × 0.33 = $ 3366

B-Saving from reduction in orders

= Orders reduced × Order Cost

= (3− 3) × 100 = 0

C-Increase in holding cost

= Increase in average inventory × holding cost per unit per annum

Holding cost is 17% of purchase price

So for 500 units it is=$170 (17% of $2 per pound)

For 384.90 units= $196.30 (17% of $3 per pound)

Increase in holding cost= 170-196.30= $-26.30

Net savings on discount order quantity = A + B − C = 3366 + 0 – (-26.30) = $3392.30

Since the net effect on income is positive, the store should place the order for quantity discount.

You might be interested in
The optimal solution to a linear programming model that has been solved using the graphical approach:______.
wlad13 [49]

Answer:

Option d would be the appropriate choice.

Explanation:

  • At either the vertices including its continuum that ranges exist the optimal solutions towards linear programming challenges. Throughout this instance, the feasible area is just the section between some of the blue as well as red sections of the green map.
  • The green squares that describe the point of convergence between some of the red or green outlines seem to be the optimal solution.

Some other choices don't apply to the specified situation. So, the best one is the one mentioned.

5 0
3 years ago
Your career goals might help determine the postsecondary educational institute you attend.
s344n2d4d5 [400]
I believe that it does help determine that because if you want to be a teacher then 9 times out of 10 you go to a college to be a teacher and get your degree.
7 0
3 years ago
Read 2 more answers
Why should management increase with the size of the company?
Evgen [1.6K]

Answer:B. So that the growth can be carefully monitored and managed

Explanation: Management is an act of planing,coordinating and the executing responsibilities in order to improve efficiency.

When a company grows the number of managers are expected to increase so that the activities of the organization is effectively coordinated,growth can be properly and efficiently monitored and managed.

If growth is not efficiently monitored and managed it will hinder the overall performance of the organization.

6 0
3 years ago
The proper order of the following steps in the accounting cycle is prepare unadjusted trial balance, journalize transactions, po
photoshop1234 [79]

Answer:

<em>The Accounting Cycle is as follows:</em>

<em>1. Transactions are analyzed and recorded in the journal. </em>

<em>2. Transactions are posted to the ledger.</em>

<em>3. An unadjusted trial balance is prepared. </em>

<em>4. Adjustment data are asssembled and analyzed. </em>

<em>5. An optional end-of-period spreadsheet is prepared. </em>

<em>6. Adjusting entries are journalized and posted to the ledger. </em>

<em>7. An adjusted trial balance is prepared. </em>

<em>8. Financial statements are prepared. </em>

<em>9. Closing entries are journalized and posted to the ledger. </em>

<em>10. A post-closing trial balance is prepared. </em>

<em />

8 0
3 years ago
True or false: All final purchases of plant, machinery, and equipment in a given time period are included as gross investment.
sleet_krkn [62]

Answer:

mira eso es muy fácil yo me lo sé pero no es de consultar en el internet as lo con tu mente que facil

4 0
3 years ago
Other questions:
  • On October 31, 2021, Damon Company’s general ledger shows a checking account balance of $8,415. The company’s cash receipts for
    10·1 answer
  • A report found that the real entry-level wage for college graduates declined by 6 percent between 2003 and 2010.
    14·1 answer
  • Suppose Jones Company manufactures chairs. One model is the executive chair that sells for $120. Jones Company projects sales of
    10·1 answer
  • Given your understanding of the marketing discipline (analyzing the situation through the 3cs, developing marketing strategy thr
    15·1 answer
  • [preparing trial balance] I am suppose to be preparing a trial balance but base on the accounts and information I have, I have t
    11·1 answer
  • Danielle, a graduate in fashion technology, always found it tough to find clothes for her as she belonged to the category of plu
    6·1 answer
  • The following table contains financial information for Trumpeter Inc. before closing entries:
    13·1 answer
  • Which of the following is not an example of safeguarding inventory? a.storing inventory in restricted areas b.returning inventor
    14·1 answer
  • Roberta is taking the final course in the fourth semester of the Veterinary Technician program. When she reads the final project
    11·1 answer
  • What is a worrisome consequence under the joint and several liability principle?
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!