ZuoTi.Pro
Question

6. Torque Manufacturing forecasts that its production will require 600,000 tons of bauxite over its planning...

6. Torque Manufacturing forecasts that its production will require 600,000 tons of bauxite over its planning period (365 days). Demand for Torque's products is stable over time. Ordering costs amount to an average of $15 per order. Holding costs are estimated at $1.25 per ton of bauxite. The EOQ for Torque is _____ tons.

7. Following Question 6, what is the total annual cost of inventory?

8. Following Question 6, if it takes 7 days to receive an order from suppliers, at what inventory level should anther order be replaced?

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

Homework Answers

Answer #1

ques 1:

we find EOQ = ((2*ANNUAL DEMAND*ORDER COST)/HOLDING COTS)^1/2

SO WE HAVE DEMAND=600000 TONS

ORDER COST =$15 PER ORDER

HOLDING COST = $1.25 PER TON

USING THE FORMULA WE GET

EOQ UNITS = 3795 UNITS

QUES 2

COST OF INVENTORY = 3795 *1.25 = $4743

QUES 3

REODER QUANTITY

DAILY USAGE = 600000/365 DAYS

REORDER QUANTITY = 600000/365 DAYS * 7 DAYS =11506.85

0 0
Add a comment
Know the answer?
Add Answer to:
6. Torque Manufacturing forecasts that its production will require 600,000 tons of bauxite over its planning...
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

  • 1) An increase in days sales outstanding (DSO), all other things equal, would ________ the cash...

    1) An increase in days sales outstanding (DSO), all other things equal, would ________ the cash conversion period and reflect _________ liquidity. a) increase, increased b) increase, decreased c) decrease, increased d) decrease, decreased 2) Torque Manufacturing forecasts that its production will require 250,000 tons of bauxite over its planning period. Demand for Torque's products is stable over time. Ordering costs amount to an average of $25 per order. Holding costs are estimated at $2 per ton of bauxite. EOQ...

  • Lott Manufacturing, Inc. has been ordering parts for its production process in lots of 10,000 units....

    Lott Manufacturing, Inc. has been ordering parts for its production process in lots of 10,000 units. Each order costs the firm $50 to place, and holding costs per unit average $3. Lott uses 200,000 units every 250 days. Calculate the EOQ. Calculate the difference in inventory costs implied by the EOQ and the current order quantity of 10,000 units. If it takes 2 days to receive an order from suppliers, at what inventory level should another order be placed?

  • My Manufacturing is involved in the production of machine parts. The company uses​ 600,000 pounds of...

    My Manufacturing is involved in the production of machine parts. The company uses​ 600,000 pounds of steel annually. The current purchasing cost for steel is​ $3.20 per pound. The carrying cost for inventory is 10 percent of the purchase price. The cost of ordering steel is​ $800 per order. The company has decided to maintain a safety stock of​ 15,000 pounds. The delivery time per order is 6 days. The company works 365 days a year. ​A) What is the...

  • Economic Order Quantity Ottis, Inc., uses 656,100 plastic housing units each year in its production of...

    Economic Order Quantity Ottis, Inc., uses 656,100 plastic housing units each year in its production of paper shredders. The cost of placing an order is $24. The cost of holding one unit of inventory for one year is $12. Currently, Ottis places 162 orders of 4,050 plastic housing units per year. Required: 1. Compute the economic order quantity. X units 2. Compute the ordering, carrying, and total costs for the EOQ. Ordering cost $ X Carrying cost Total cost 3....

  • Part 1 Banana Inc. currently needs exactly 600 LCD screens per month for their smartphones. They...

    Part 1 Banana Inc. currently needs exactly 600 LCD screens per month for their smartphones. They currently order 450 screens in every order. The contracted price for screens is $20 per unit and they have calculated the storage and other inventory holding costs to be 30% of the price per year per item. Other costs associated with ordering (per order) are: - Order placement fees (documentation, network support): $100 - Delivery costs (Fuel, Driver, Truck, etc.): $150 - Cost of...

  • A5: Packing Crate Inventory MGT305 You’ve recently been hired as a project manager at a distribut...

    A5: Packing Crate Inventory MGT305 You’ve recently been hired as a project manager at a distributor of fruits and vegetables located in Northern Kentucky. An operations manager has asked for your help in analyzing current inventory policies related to packing crates. She’s looking for a lower cost policy. Currently, the operation buys crates from a regional supplier. The operation uses 1800 crates each month. Annual carrying cost is 18% of the $6 acquisition cost per crate. Each order costs approximately...

  • A store faces demand for one of its popular products at a constant rate of 2,400...

    A store faces demand for one of its popular products at a constant rate of 2,400 units per year. It costs the store $70 to process an order to replenish stock and $20 per unit per year to carry the item in inventory. A shipment from the supplier is typically received 12 working days after an order is placed. The store buys the product for $90 per unit and sells it for $160 per unit. At the moment the store...

  • Problem 2 The ER would like to add Tegaderm (a semi-occlusive dressing) to the pharmacy’s inventory,...

    Problem 2 The ER would like to add Tegaderm (a semi-occlusive dressing) to the pharmacy’s inventory, as it currently stocks none and it would be helpful for patients to be able to apply at home after discharge. It has been assigned SKU-2319. You are in charge of ordering the correct amount of inventory. We know demand will be 80 dressings per day. Tegaderm is pricey, at about $1.50 per dressing with a fixed ordering and shipping cost of $12 per...

  • Qwerty Corp. is about to begin production on two homes in a new housing subdivision. Qwerty...

    Qwerty Corp. is about to begin production on two homes in a new housing subdivision. Qwerty Corp. anticipates that it will need 80,000 square feet of lumber over its 450 day construction cycle. Ordering and holding costs are $6/order and $8/sq.ft., respectively. Qwerty Corp.'s turnaround time on a lumber order is 2 days. Round intermediate calculations, but round final answer to 2 decimal places. Part 1. How many orders should Qwerty Corp. make to minimize inventory costs? Part 2. At...

  • Rice Inc. is a multinational company supplying starch worldwide. In order to cope with the increasing...

    Rice Inc. is a multinational company supplying starch worldwide. In order to cope with the increasing demand, Rice Inc. needs to purchase Rice from many countries to be processed it in its milling plants. Weekly demand for starch over the last 10 years (2009-2018) is given: AVERAGE DEMAND OVER THE LAST 10 years is 1052.12 The cost to prepare a purchase order of rice is RO 200. Each ton of rice costs the company RO 80 and the annual inventory...

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