Consider the following information on an inventory management system:
Item Cost: $10
Order Cost: $250
Annual Holding Cost: 33% of item cost
Annual Demand: 25,750
Average Demand: 515 per week
Std. Dev. of Demand: 125 per week
Leadtime: 2 weeks
1. Ignoring the uncertainty in the demand (i.e. looking only at average values), find the optimal order quantity and the reorder point. What is the annual inventory holding and ordering cost for this policy?
2. Consider now the uncertainty. The order quantity remains the same. If the target is to have a 98% fill rate, what should be the reorder point? What is the safety stock? How much additional inventory cost is incurred due to the safety stock? What should be the reorder point?
In: Operations Management
(Individual or component costs of capital) Compute the cost of the following:
a. A bond that has $1 comma 000 par value (face value) and a contract or coupon interest rate of 8 percent. A new issue would have a floatation cost of 6 percent of the $1,120 market value. The bonds mature in 13 years. The firm's average tax rate is 30 percent and its marginal tax rate is 35 percent.
b. A new common stock issue that paid a $1.30 dividend last year. The par value of the stock is $15, and earnings per share have grown at a rate of 8 percent per year. This growth rate is expected to continue into the foreseeable future. The company maintains a constant dividend-earnings ratio of 30 percent. The price of this stock is now $27, but 7 percent flotation costs are anticipated.
c. Internal common equity when the current market price of the common stock is $42. The expected dividend this coming year should be $3.30, increasing thereafter at an annual growth rate of 11 percent. The corporation's tax rate is 35 percent.
d. A preferred stock paying a dividend of 9 percent on a $120 par value. If a new issue is offered, flotation costs will be 13 percent of the current price of $165.
e. A bond selling to yield 9 percent after flotation costs, but before adjusting for the marginal corporate tax rate of 35 percent. In other words, 9 percent is the rate that equates the net proceeds from the bond with the present value of the future cash flows (principal and interest).
In: Finance
the production department wants to decide on one of the alternatives to minimize the cost. the alternative below 1. continue the production with your existing machine with a 2,00 $ cost per unit. 2. upgrade your machine with 800$ investment and reduce your unit cost to 2.20$per unit. 3. buy a high technology new machine for 1200$and have a lower units cost 1.50$ per unit. your are expected to give a report on: a. find the feasible domain in terms of the level of production for each alternative. b. show your solution on a graph
In: Operations Management
In: Economics
How do you come with the budgetary cost for convenience outlet?
In: Civil Engineering
What are flotation costs and why they must be included in the initial cost of a project? Explain in detail.
The differences between the standard deviation and beta in the measurement of risk in the capital market.
In: Finance
An important application of regression analysis in accounting is in the estimation of cost. By collecting data on volume and cost and using the least squares method to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular manufacturing volume. Consider the following sample of production volumes and total cost data for a manufacturing operation. Production Volume (units) Total Cost ($) 400 4,700 450 5,700 550 6,100 600 6,600 700 7,100 750 7,700 Compute b1 and b0 (to 1 decimal). b1 b0 Complete the estimated regression equation (to 1 decimal). = + x What is the variable cost per unit produced (to 1 decimal)? $ Compute the coefficient of determination (to 3 decimals). Note: report r2 between 0 and 1. r2 = What percentage of the variation in total cost can be explained by the production volume (to 1 decimal)? % The company's production schedule shows 500 units must be produced next month. What is the estimated total cost for this operation (to the nearest whole number)? $
In: Math
Write a program that will calculate and display the cost of a gasoline purchase based on the brand of gasoline, the octane rating and the amount purchased.
Your program should first display a menu prompting the user for the brand of gasoline. Next prompt the user for the amount of gasoline in liters.
Finally, your program should calculate and display the cost of the gasoline purchase using the formula below.
Notice that the units of measure for the amount of gasoline in the formula are in gallons (not liters). You will need to convert liters into gallons using this conversion factor: 1 liter = 0.264172 gallons
Sample Input and Output (output should match exactly, including decimal scale)
CPCC Gasoline Services
Enter the brand type: 2
Enter the octane rating: 90
Enter the amount of gasoline in liters: 68.04
The cost of the gasoline is $51.95
In: Computer Science
In 1993, Skysong Company completed the construction of a building at a cost of $2,120,000 and first occupied it in January 1994. It was estimated that the building will have a useful life of 40 years and a salvage value of $64,000 at the end of that time. Early in 2004, an addition to the building was constructed at a cost of $530,000. At that time, it was estimated that the remaining life of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a salvage value of $21,200. In 2022, it is determined that the probable life of the building and addition will extend to the end of 2053, or 20 years beyond the original estimate.
Compute the annual depreciation to be charged, beginning with 2022. (Round answer to 0 decimal places, e.g. 45,892.)
| Annual depreciation expense—building |
In: Accounting
A new piece of equipment will have a fixed cost of $250,000 and the product it would produce has a variable cost of $22.50, and a selling price of $35.
A. What is the break-even point?
B. How many units must be sold to make a profit of $750,000?
C. How many units must be sold to average $0.50 profit per unit? $0.75 profit per unit? And $2.50 per unit?
D. If investors expect a 15% Return on Investment (ROI), how many units must be sold to achieve this goal?
In: Operations Management