Calculate the total annual cost incurred for the economic

Assignment Help Operation Management
Reference no: EM13215396

Consider a hardware supply warehouse that is contractually obligated to deliver 1,000 units of specialized fastener to a local manufacturing company each week. Each time the warehouse places an order for these items from its supplier, an ordering and transportation fee of $20 is charged to the warehouse. The warehouse pays $1.00 for each fastener and charges the local firm $5.00 for each fastener. Annual holding costs is 25 percent of inventory value, or $0.25 per year. The warehouse manager would like to know how much to order when inventory gets to zero. To answer this question, we can use the formula defined above. Annual demand (assuming the manufacturing plant operations for 50 weeks a year ) is 50,000 units, annual holding cost is $0.25 per unit, and fixed setup cost per unit is $20.00. Each time the warehouse places an order, the optimal order quantity is thus 2,828.

Instructor requirements: Apply the economic order quantity formula to the data in Example 2-2 on Page 35 in the textbook, and reproduce the answer of 2,828 units. Also, calculate the total annual cost incurred for the economic order quantity. Submit your solution.

Reference no: EM13215396

Questions Cloud

Main programs of the new deal’s hundred days : "What were the main programs of the New Deal’s “Hundred Days”? What were their goals? Evaluate the success of the various programs." 300 word minimum 500 max
Describe the considerations : Describe the considerations that organizations and investigators must take into account when determining the appropriate tools to use, while knowing that the tool will be used to support legal proceedings.
Determining goals to be pursued : Involves analyzing a situation, determining goals to be pursued, and deciding upon the actions that will be taken to achieve these goals.
Discuss the typical security vulnerabilities : Discuss the typical security vulnerabilities at each IB software and hardware level.
Calculate the total annual cost incurred for the economic : Apply the economic order quantity formula to the data in Example 2-2 on Page 35 in the textbook, and reproduce the answer of 2,828 units. Also, calculate the total annual cost incurred for the economic order quantity.
What are the criticisms of the sarbanes-oxley act : The United States Congress passed the Sarbanes-Oxley Act of 2002 after several major U.S. corporations were exposed for unethical accounting and reporting practices. During this time period, investor confidence weakened, leading many corporations ..
Write the student info and processed data : Implement the following algorithm in C# using WFA GUI. Write the student info and processed data (student name, exams, avg and grade and ...) to student database
Develop a training program : "Your employees will soon be finishing their trial period and will be starting their regular job assignments. Your manager is concerned that they will continue to learn and grow on the job. He has asked you to develop a training program.
Investment to help increase the productivity : Evaluate whether or not this is a valid and worthwhile investment to help increase the productivity within an organization. Describe your personal experience(s) with just-in-time learning

Reviews

Write a Review

Operation Management Questions & Answers

  Describe your mne with a brief business plan

Create a fictional MNE which manufactures an imaginary product and choose a country in which to conduct FDI. Describe your MNE with a brief business plan

  Which batches should machine center b be used

Job shop makes products in batches ranging from 1 unit to 1 hundred units. Assuming capacity is not a limitation on either machine, on which batches should Machine Center B be used.

  Using decision trees analysis and emv

Using decision trees analysis and EMV, what should JDI do? Show the decision tree. Using decision trees analysis and EMV

  Determine the average amount of time that a guest spends

Determine the average amount of time that a guest spends checking in. How would this change under each of the stated options? Which option would you recommend?

  Foreign exchange traders

X and Y are foreign exchange traders in Germany. X agrees to sell 100 million Mexican pesos to Y for delivery within 1 week at an agreed price in German marks.

  Explain how easy was it to find specific occupation

Explain how easy was it to find specific occupation (Technical Management) you were looking for also explain how comprehensive was information provided about that occupation.

  Obtaining a measure of overall performance

Cunningham Performance Auto, Inc. modifies 375 autos per year. The manager, Peter Cunningham, is interested in obtaining a measure of overall performance.

  Explain the functions of management

What are the four functions of management? Define them. How do these functions relate to the goals of an organization? What is the relationship of efficiency and effectiveness to organizational performance?

  If an extremely intelligent hacker is caught by a law

If an extremely intelligent hacker is caught by a law enforcement agency, should that hacker be prosecuted and sent to jail?

  A firm plans to begin production of a new small appliance

A firm plans to begin production of a new small appliance. The manager must decide whether to purchase the motors for the appliance from a vendor at $7 each or to produce them in-house.

  Importance of innovation to the success of individuals

Describe the relationship between technical/traditional problem solving and creative/intuitive problem solving. Explain the importance of innovation to the success of individuals, organizational leaders, organizations, and nations.

  Producing one unit of product

Boilermakers, Inc. produces 3 products: A, B, and C. The unit prices of product A, B, and C are $5, $50 and $200, respectively. Assume that these products can be sold in unlimited quantities.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd