ZuoTi.Pro
Question

Redan Manufacturing uses 2,500 switch assemblies per week and then reorders another 2,500. The relevant carrying...

Redan Manufacturing uses 2,500 switch assemblies per week and then reorders another 2,500. The relevant carrying cost per switch assembly per year is $10.00, and the fixed order cost is $ 1,250. Suppose the firm manages its inventory over an one year period. What is the Economic Order Quantity ( EOQ)?

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1
Annual Demand = D = 2500*52 = 130000/year
Ordering Cost = Co = $1250
Holding Cost = Cc = $10
Economic Order Quantity Q* = √(2DCo/Cc) = √(2*130000*1250*/10) = 5700.88
0 2
Add a comment
Know the answer?
Add Answer to:
Redan Manufacturing uses 2,500 switch assemblies per week and then reorders another 2,500. The relevant carrying...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Clap Off Manufacturing uses 2,400 switch assemblies per week and then reorders another 2,400. Assume the...

    Clap Off Manufacturing uses 2,400 switch assemblies per week and then reorders another 2,400. Assume the relevant carrying cost per switch assembly is $6.10 and the fixed order cost is $565. a. Calculate the carrying costs. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. Calculate the restocking costs. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c. Calculate the economic order quantity. (Do...

  • The Burdell Company is a small manufacturing company that uses gear assemblies to produce four different...

    The Burdell Company is a small manufacturing company that uses gear assemblies to produce four different models of mountain bikes. One of these gear assemblies, the "Smooth Shifter", is used for the two most expensive of Burdell's four models, and has an estimated weekly demand of 7 units. Currently, this assembly is purchased in lots of 100 units. Burdell estimates the cost to place an order is $40, and the holding cost for each assembly is $5/unit/month. The company operates...

  • Accounting

    Question 2 (Total marks= 20) (a) Consider the following financial data (in millions of dollars) for Costello Laboratories over the period of 2014–2018: Year Sales Net income Total assets Common equity 2014 $3,800 $500 $3,900 $1,800 2015 4,400 650 4,400 2,100 2016 5,000 750 4,800 2,500 2017 5,400 860 4,900 2,700 2018 6,200 1,000 5,600 2,800 Using the Du Pont System, describe the changes in the return on equity from year to year. (10 marks) (b) Construct the common size...

  • The Boilermakers is a manufacturing company that uses gear assemblies to produce four different models of...

    The Boilermakers is a manufacturing company that uses gear assemblies to produce four different models of mountain bikes. One of these gear assemblies, the "Smooth Shifter," is used for the two most expensive models, and has an estimated annual demand of 540 units. The Boilermakers estimates the cost to place an order is $100, and the holding cost for each assembly is $10 per month. a) Currently, not knowing about EOQ, the purchasing manager places an order for the Smooth...

  • The Talbot Company uses electrical assemblies to produce an array of small appliances. One of its...

    The Talbot Company uses electrical assemblies to produce an array of small appliances. One of its high cost / high volume assemblies, the XO-01, has an estimated annual demand of 8,000 units. Talbot estimates the cost to place an order is $50, and the holding cost for each assembly is $10 per year. The company operates 250 days per year. What is the total annual holding and ordering cost if Talbot orders using the Economic Order Quantity (EOQ)?

  • A 3. Carter Limited orders 250 units at a time, and places 15 orders per year....

    A 3. Carter Limited orders 250 units at a time, and places 15 orders per year. Total ordering cost is $1,600 and total carrying cost is $1,250. Which of the following statements is true? The economic order quantity (EOQ) is 250. A The economic order quantity (EOQ) is more than 250. The economic order quantity (EOQ) is less than 250. Total inventory-related cost is lower than it would be at the economic order quantity (EOQ). None of these. 4. Carter...

  • LIVILY Selection 3. Carter Limited orders 250 units at a time, and places 15 orders per year. Total ordering...

    LIVILY Selection 3. Carter Limited orders 250 units at a time, and places 15 orders per year. Total ordering cost is $1,600 and total carrying cost is $1,250. Which of the following statements is EU S@ The economic order quantity (EOQ) is 250. The economic order quantity (EOQ) is more ES than 250. The economic order quantity (EOQ) is less than 250. Total inventory-related cost is lower than it would be at the economic order quantity (EOQ) E. None of...

  • EOQ, reorder point, and safety stock Alexis Company uses 631 units of a product per year...

    EOQ, reorder point, and safety stock Alexis Company uses 631 units of a product per year on a continuous basis. The product has a fixed cost of $41 per order, and its carrying cost is $4 per unit per year. It takes 5 days to receive a shipment after an order is placed, and the firm wishes to hold 10 days' usage in inventory as a safety stock. a. Calculate the EOQ. b. Determine the average level of inventory. (Note:...

  • EOQ, reorder point, and safety stock Alexis Company uses 805 units of a product per year...

    EOQ, reorder point, and safety stock Alexis Company uses 805 units of a product per year on a continuous basis. The product has a fixed cost of $50 per order, and its carrying cost is $4 per unit per year. It takes 5 days to receive a shipment after an order is placed, and the firm wishes to hold 10 days' usage in inventory as a safety stock. a. Calculate the EOQ. b. Determine the average level of inventory. (Note:...

  • "Peterson Enterprises uses a fixed order quantity inventory control system. The firm operates 50 weeks per...

    "Peterson Enterprises uses a fixed order quantity inventory control system. The firm operates 50 weeks per year and has the following characteristics for an item: Demand = 50,000 units/year, Ordering cost = $35/order, Inventory-carrying or holding cost as a percent of item value = 25%, Item (Unit) cost = $8 calculate the economic order quantity (EOQ) that is the Square Root (2 * Demand * Ordering cost)/Square root (holding cost * unit cost)"

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT