A. The expected demand for a regular component is 2000 units per year. The item can...

A. The expected demand for a regular component is 2000 units per year. The item can be purchased from Bonjo Limited. Their lists are shown in the table below. The ordering cost is $200 and the carrying cost per unit is 75%. The cost is $20.

BONJO LIMITED
QUANTITY	DISCOUNT
1 - 199	0%
200 - 499	2%
500 - more	5%

You have just been promoted as the operations manager for this firm. Advise the purchasing manager in making the following decisions.

i. What is the economic order quantity?

ii. If BONJO wants to consider quantity discount, what quantity should he order and why?

B. Over the past year Jojo Ltd had annual sales of 10, 000 detergent paste ‘KEY’. The average quarterly sales for past 5 years have averaged; ?1 = 4000, ?2 = 3000, ?3 = 2000, and ?4 = 1000. Find the seasonal index.

Expert Solution

Economic Order Quantity is the number of unit that is added to the inventory which minimize the total inventory cost. It maintain a balance between ordering costs and carrying costs.

keosha answered 5 months ago

Demand for an item is 1,000 units per year. Each order placed costs $10, the annual...

Demand for an item is 1,000 units per year. Each order placed costs $10, the annual cost to carry items in inventory is $2 each. Suppose the lead time is 6 days. Assume sales occur over 360 days of the year. In what quantities should the item be ordered based on the EOQ model? (2 points) What is the reordering point? (2 points) Explain the inventory management policy. (1 point)

Demand for an item is 18644 units per year. Each order placed costs $94. The annual carrying cost percentage per item in inventory is 20 percent each.

Demand for an item is 18644 units per year. Each order placed costs $94. The annual carrying cost percentage per item in inventory is 20 percent each. The variable purchase cost is $2.5 per unit if less than 3000units will be ordered, $ 2.4 from 3000 units up to (but not including) 4000 units, and $2.3 for at least 4000 units. These are all-units discounts.(A) What is the optimal order quantity Q* for the unit cost of $2.3? Please round...

Sorur Inc. has gone out on bid for an electronic component. Expected demand is 500 units...

Sorur Inc. has gone out on bid for an electronic component. Expected demand is 500 units per month. The item can be purchased from either Asha Manufacturing or Brian Manufacturing. Their price schedule is shown below. Ordering cost is $25, and annual holding cost per unit is $15. Ahsa Mfg. Brian Mfg. Quantity Price/unit Quantity Price/unit 1- 199 $20.00 1 – 299 $20.00 200 – 399 $19.80 300 – 599 $19.75 400+ $19.60 600+ $19.50 What is the optimal...

Product A is the end item and is made from 3 units of component B and...

Product A is the end item and is made from 3 units of component B and 4 units of component C. Component B is made from 2 units of component D and 2 units of component E. Component C is made from 2 units of component F. Lead times are as follows: A = 1 weeks, B = 2 weeks, D = 1 week, and E = 1 week. A) Draw the bill of materials for Product A. (2 points)...

The factory capacity is 25,000 units per year, but demand is 40,000 units. You have an...

The factory capacity is 25,000 units per year, but demand is 40,000 units. You have an opportunity to buy equipment that will allow your company to meet the 40,000 unit annual demand. The equipment will only last 7 years and have no use or no value after that. The equipment costs $4,567,890 - plus 8.88% sales tax, 1.2% dealer fee, and $13,917 for title and license fees. The company will pay the equipment off interest free over the next 5...

Demand averages 20,002 units per year and operates 365 days per year. Holding cost= $5 per...

Demand averages 20,002 units per year and operates 365 days per year. Holding cost= $5 per unit per year while the ordering cost is $100 per order. Company is currently using a periodic (P) inventory system, holding 1000 units in safety stock to cover demand uncertainty and placing orders for every 73 days. The company is investigating the possibility of using a continuous review (Q) inventory system with holding 15 units in safety stock to cover demand uncertainty. Use the...

Suppose that the annual demand for a component is approximately56,000 units. The company orders the...

Suppose that the annual demand for a component is approximately 56,000 units. The company orders the component from a supplier who has offered the following quantity discount schedule.Order Quantity0-9991,000-1,4991,500-3,4993,500or morePrice Per Unit$33$31$29$27If the company's carrying charge is 25% of the item's price and the cost per order is $330, determine the order quantity that would minimize the total related inventory costs for this component.The company's decision would be to order ____ Units.The total annualized ordering costs for this quantity is____

Say that Alland can produce 32 units of food per person per year or 16 units...

Say that Alland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Georgeland can produce 24 units of food per year or 12 units of clothing. Which of the following is true? Group of answer choices Alland has an absolute advantage in producing food but will not trade with Georgeland. Alland has a comparative advantage, but not an absolute advantage, in producing food. Georgeland has both a comparative and...

1. Gelb Company currently manufactures 58,500 units per year of a key component for its manufacturing...

1. Gelb Company currently manufactures 58,500 units per year of a key component for its manufacturing process. Variable costs are $6.25 per unit, fixed costs related to making this component are $75,000 per year, and allocated fixed costs are $83,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.70 per unit. Calculate the total incremental cost of making 58,500 units and...

PPG is expected to earn $4 per share in one year. The market demand for the...

PPG is expected to earn $4 per share in one year. The market demand for the new product is expected to be high so PPG decides to retain 60% of its earnings in year 1, 2, and 3. The reinvestments are expected to generate 10% return. Starting from year 4, PPG will maintain an 60% dividend payout rate because the investment return is expected to decline to 5% due to increased competition from similar products. (round to two decimal places...

Question