The Saugatuck Soda Company uses an average of 2,000 kg of sugar per day in producing its premium soda. Their production facility operate 360 days per year. They purchase sugar at $0.40/kg delivered. It costs Saugatuck $200 to process and order for sugar. They use a factor of 18% of the cost of sugar as the annual holding cost.
Calculate the economic order quantity for sugar for Saugatuck Soda.
Economic Order Quantity refers to the number of unit the company should add to the inventory and the order is made to minimize the total inventory cost. It maintain a balance between ordering costs and carrying costs. Reorder point is the level of inventory which the firm holds in stock and when the inventory level reach this point, the firm must reorder the item.
EOQ act as a review inventory system to monitor the inventory level continuously and once the level reaches the reorder point, a fixed quantity of order is placed. Thus EOQ helps in calculating reorder point and optimal reorder quantity to avoid shortage of inventory.
The Saugatuck Soda Company uses an average of 2,000 kg of sugar per day in producing...
Barksdale Biscuits is a small manufacturer of gourmet dog biscuits and uses an average of 6,900 pounds of flour per week and works 50 weeks per year. Barksdale buys flour at $0.20/lb delivered. It costs them $85 to process an order. They use 16% of the purchase price for flour to calculate the annual holding cost. Calculate the economic order quantity for flour for Barksdale Biscuits.
Assignment 4.6: Inventory Controls Assignment A 1. A game controller manufacturer uses approximately 31,000 computer chips annually. The chips are used at a steady rate during the 230 days a year that the plan operates. Annual holding cost is $3 per chip, and ordering cost is $120. Determine: a) the optimal order quantity b) the number of workdays in an order cycle 2. The Garble Corporation produces brass rings for its assembly of Fancy Garbles. The firm operates 220 days...
Barksdale Biscuits is a small manufacturer of gourmet dog biscuits and uses an average of 7,000 pounds of flour per week and works 50 weeks per year. Barksdale buys flour at $0.20/lb delivered. It costs them $50 to process an order. They use 12% of the purchase price for flour to calculate the annual holding cost. Calculate the economic order quantity for flour for Barksdale Biscuits. Your Answer:
Race One Motors is an Indonesian car manufacturer. At its largest manufacturing facility, in Jakarta, the company produces subcomponents at a rate of 305 per day, and it uses these subcomponents at a rate of 12,500 per year (of 250 working days). Holding costs are $2 per item per year, and ordering costs are $29 per order. a) What is the economic production quantity? b) How many production runs per year will be made? c) What will be the maximum...
A company uses 1450 rolls of masking tape annually. It costs the company $15 to order and receive this product. The masking tape costs $3.42 per roll. The company uses a factor of 16% of the purchase price to determine the annual holding cost for this product. What is the Economic Order Quantity (EOQ)? 61 rolls 281.9 rolls 2.7 rolls 79,495 rolls 381.2 roll:s
QUESTION Z (10 marks; 18 minutes) Rudd Company uses 40 000 micro-chips each year in its p roduction of the tactical binoculars working day, however, some days for the defence force. An average of 140 units are used per th ey use up to 150 units. The cost of placing an order is R75 and the cost of holding one unit of inventory for one year is R8, Currently Rudd places 20 orders of 2 000 units per order Required:...
In the Eagle Beer example, we have the following information. Demand is 2,000 cases per week Cost of product is $8 per case Holding cost: 18% cost of capital, 7% other costs, applied to unit cost of product Ordering cost: (3/4) hours of labor at $20 per hour, $17 per order other costs Number of operating days: (52 weeks)×(5 days/week) Answer the following question using this information. Use two decimal places in your calculations. Do not round the numbers to...
Question 1 (10 points) A company uses 1450 rolls of masking tape annually. It costs the company $15 to order and receive this product. The masking tape costs $3.42 per roll. The company uses a factor of 16% of the purchase price to determine the annual holding cost for this product. What is the Economic Order Quantity (EOQ)? 381.2 rolls 0 61 rolls 281.9 rolls 2.7 rolls 79,495 rolls
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)?
MySchool Notebook Company uses 130,000 pounds of plastic pellets per year in the production of their custom 3-ring school binders. They buy the pellets at a cost of $0.75/lb delivered. They estimate that it costs them $40 to place and put away an order of pellets. They use an inventory holding rate of 20% of the cost of an item. Calculate the economic order quantity for plastic pellets for MySchool Notebook.