Question

1. Tangshan Mining was extended credit terms of 2/10 net 30. The cost of giving up the cash discount, assuming payment would be made on the last day of the credit period, would be

2. The General Chemical Company uses 1,100,000 gallons of hydrochloric acid per year. The cost of carrying the chemical in inventory is 50 cents per gallon per year, and the cost of ordering the chemical is $110 per order. The firm uses the chemical at a constant rate throughout the year. The chemical's economic order quantity is

3. A firm uses 700 units of product per year (360 days) on a continuous basis. The product has a carrying cost of $40 per unit per year and order costs of $250 per order. It takes 20 days to receive a shipment after an order is placed and the firm requires a safety stock of 6 days usage in inventory. Calculate the reorder point.

Answer 1

be langshan mining Cost of giving up dLscourb discoune days in a yeas 00-% discour&) Chaymed datu-discounted period) ニ(2Iq8) (365 /20) 2365 loo-2 30-10 O.50 -J4By ,000,000 ㄷ On4 = 22,000 gallons = 38.89 + 11. 6