Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Example of EOQ Assumptions
ABC Ltd requires 2,000 units of a component in its manufacturing method in the coming year that costs of Sh.50 each. The items are obtainable locally and the lead-time in one week. Each order costs of Sh.50 to prepare and process whereas the holding cost is of Shs.15 per unit per year for storage plus 10 percent opportunity cost of capital.
Required
a) How many units must be ordered each time an order is located to minimize inventory costs?
b) What is the reorder level?
c) How many orders will be located per year?
d) Find out the total relevant costs.
Suggested Solution:
a)
Where : D = 2,000 units
Co = Sh.50
Cn = Sh.15 + 10% x 50 = Sh.20
L = 7 days
b) R = DL/360
= (2,000 * 7)/360
= 39 units
c) Number of orders = D/Q
= 2,000/100
= 20 orders
d) TC = ½QCn + (D/Q) * C0
= ½(100)(20) + (2,000/100) * 50
= 1,000 + 1,000
= Sh.2,000
Beneath the basic EOQ Model the inventory is permitted to fall to zero just before another order is acknowledged.
what are the difference between receipt and payment account and income and expenditure account ?.
Capital Corporation, which has a target capital structure of 40 percent debt and 60 percent common equity, is evaluating an expansion project with an 8.5 percent IRR. The project c
Source of Finance for the Sole Proprietor Some sources of capital---Discuss a) Savings b) Assistance from friends or relatives c) Proceeds from sale of assets d) Ba
The financial data is of little value in its raw form. However, the same may be analyzed and be put in the form more meaningful to the recipients. This is normally done by using va
Primary Markets - Financial Markets These are markets such deal along with securities that have been issued for the first moment. The money flows directly from transferor or t
term paper about financial markets in pakistan
give an introduction about stock exchage in india,,includig BSE
Solutions to agency problem The bondholders might receive the following procedures to protect themselves from the process of the shareholders that might dilute the value of th
Debtors Collection Period - Formula Fomula is given below: Debtors collection period = 365/ Debtors turnover Or (365 x Average debtors)/ Annual credit sales This
Disadvantage of Leasing an Asset A. It is a pre-conditional finance as on the needs of asset B. In the long term the lease charges might out-weigh the cost of buying own as
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd