What will annual inventory turnover rate be for this item

Assignment Help Operation Management

Reference no: EM131731123

Johnson Corporation has the following information about a product that it carries in stock: Use Table 7-2.

Average demand = 60 units per day

Average lead time = 20 days

Item unit cost = $54 for orders of less than 400 units

Item unit cost = $47 for orders of 400 units or more

Ordering cost = $27

Inventory carrying cost = 20%

The business year is 300 days

Standard deviation of demand = 3.2 units

Standard deviation of lead time = 2 days

Desired service level = 95%

a. What is the annual total acquisition cost of ordering at the $54 price? (Do not round intermediate calculations. Round your calculation for EOQ to the nearest whole number and final answer to 2 decimal places.)

b. What is the annual total acquisition cost of ordering at the $47 price? (Round your answer to 2 decimal places.)

c. What level of safety stock should Johnson maintain for the item? (Do not round intermediate calculations. Round up your answer to the next whole number.)

d. If Johnson chooses the ordering policy that results in the lowest total annual acquisition cost, and maintains the safety stock level for 95 percent service, what will Johnson’s average inventory be for this item?

e. What will the annual inventory turnover rate be for this item? (Round your answer to 1 decimal place.)

f. What will the reorder point be for the item?

Reference no: EM131731123

Questions Cloud

Current share price of stock valuation : Stock Valuation. Burkhardt Corp. pays a constant $13.50 dividend on its stock. The company will maintain this dividend for the next 9 years.

How many milliliters will you administer to the patient : Administer Digoxin 0.125 mg. Available: Digoxin elixir, 0.5 mg/2 mL. How many milliliters will you administer to the patient

Case - closely associated cars : Case - Closely Associated Cars, AutoCo is an established car manufacturer that has been producing cars in the United States for the past century

Discuss the past with treatment not working well : What education will you provide. What will your recommended treatment be. Follow-up

What will annual inventory turnover rate be for this item : What is the annual total acquisition cost of ordering at the $54 price? What will the annual inventory turnover rate be for this item?

What is mary annual opportunity cost : Mary is considering leaving her current position to open an ice cream shop. What is Mary's annual opportunity cost of starting the ice cream shop

Cost to buy a seat using straight voting : If the company has 450,000 shares outstanding and the stock currently sells for $34, how much will it cost you to buy a seat if the company uses straight.

Describe the concept and general requirement of theory : Briefly describe the concept and general requirement of theory and how the requirements for developmental theory differ from general theory.

What percent are variable costs of sales : Stacker requires sales of $500,000 to cover its fixed costs of $100,000 and to earn net income of $80,000. What percent are variable costs of sales

User Account

All Pages