BUSINESS COLLEGE

Ray’s Satellite Emporium wishes to determine the optimal order size for its best-selling satellite dish (Model TS111). Ray has estimated the monthly demand for this model to be 230 units. This model costs Ray $396 to purchase from his supplier. His annual cost to carry inventory is 10% and he estimates that orders cost $38 to process. If Ray used an order quantity of 2000 instead of the optimal order quantity, how much money would he be wasting each year?

Answers

Answer 1
Answer:

Answer:

It waster $74,941.2‬ per year

Explanation:

The procedure is as follow:

  1. We calcualte the Economic order Quantity
  2. Then we calculatethe cost for EOQ and current order size
  3. compare to know the loss for inefficiency in inventory

1.- EOQ

Q_(opt) = \sqrt{(2DS)/(H)}

D = annual demand 230 units x 12 month = 2,760

S= setup cost = ordering cost = 38

H= Holding Cost= 10% of unit cost 39.60

Q_(opt) = \sqrt{(2*2760*38)/(39.6)}

EOQ = 72.78028371 = 73

2.-  Calculate Cost:

EOQ cost:

orders 2,760 / 73 = 37.80 = 38 order x $38 each = $1,444

holding cost: 73 x 39.6 = $2,890.8

Total: 1,444 + 2,890.8 = 4,334.8

Current Cost:

orders: 2,760 / 2,000 = 1.* = 2 order per year x $38 each = $76

holding cost: 2,000 x 39.6 = 79.200‬

Total 79,200 + 76 = 79,276

3.- Difference:

79,276 - 4,334.8 = 74,941.2‬

Related Questions

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An company buys a color printer that will cost $18,000 to buy, and last 5 years. It is assumed that it will require servicing costing $500 each year. What is the equivalent annual annuity of this deal, given a cost of capital of 12%? A. -$3983 B. -$4002 C. -$4957 D. -$5493

Answers

Answer:

The correct answer is option (D)

Explanation:

Solution

Given that:

The present value of equity factor for 5 years at 12% discount are = 3.60478

Then,

The present value of servicing costing = -$500 * 3.60478 = -$1802.39

Thus,

The present value of cost to buy =- $18000

The total Present value = -18000 + 1802.39 = -$19802.39

So,

The equivalent annual annuity = total Present value / present value of equity factor

= -$19802.39 / 3.60478

= -$5493.37

Therefore, the equivalent annual annuity of this deal is -$5493.37

Buffy is engaging product users to create an exhaustive list of things that bother them when they use the product and how often those situations arise, then asking the consumers to rate the list in order of importance and asking which brands are associated with the items on the list. She is using an approach called _____________________________

Answers

Answer: Problem detection

Explanation: Problem detection is used in R&D, it is a techniques that asks consumers who are familiar with the product or service to ponder upon an exhaustive list of things that bothers them while using the product.

This is done to find the ideas to make creative strategies and improvements in product/service.

Problem Detection approach identifies and prioritizes the most pressing consumer concerns so that the brand they are associated with can address unmet needs that exist in the marketplace.

as students, what plan can you suggest to prevent the spread of these observable practices in your community​

Answers

Answer:

\n \dashrightarrow \:\bf \red{ ( 0.2×336)× (t-30) = (0.5×4.2×10³×30)}

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Answers

Answer:

Services.

Explanation:

As it is been explained to be a individual or organizational performance, which directly holds certain forms of benefit to many. It also can be said to be a transaction during which no physical goods are transferred from the vendor to the customer. It holds certain advantages of such a service are held to be demonstrated by the buyer's willingness to create the exchange. Public services are those who society (nation state, fiscal union or region) as an entire pays for. Using resources, skill, ingenuity; service providers benefit service consumers.

Shao Airlines is considering the purchase of two alternative planes. Plane A has an expected life of 5 years, will cost $100 million, and will produce net cash flows of $28 million per year. Plane B has a life of 10 years, will cost $132 million, and will produce net cash flows of $27 million per year. Shao plans to serve the route for only 10 years. Inflation in operating costs, airplane costs, and fares are expected to be zero, and the company's cost of capital is 9%. By how much would the value of the company increase if it accepted the better project (plane)

Answers

Answer:

41.28 million

Explanation:

the net present value of the two alternatives needs to be determined. The appropriate alternative would be the plane with the higher NPV

Net present value is the present value of after-tax cash flows from an investment less the amount invested.  

NPV can be calculated using a financial calculator  

Alternative 1

Cash flow in year 0 = $-100 million

Cash flow each year from year 1 to 5 =  $28 million

I = 9%

NPV = $8.91 million

Alternative 2

Cash flow in year 0 = $-132 million

Cash flow each year from year 1 to 10 =  $27 million

I = 9%

NPV = $41.28 million

The second alternative has the higher NPV and it would increase the value of the company by $41.28 million if accepted

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

Final answer:

The question involves determining the Net Present Value (NPV) of each plane's cash flows, discounted at the company's cost of capital. The plane that provides the higher NPV should be selected, with the difference in the two NPV's representing the use value increase for the company.

Explanation:

To decide which project Shao Airlines should accept, we need to determine the Net Present Value (NPV) of each project. The NPV is the sum of the present values of all cash flows associated with a project, discounted at the firm's cost of capital.

For Plane A, the NPV is calculated over its expected life of 5 years. Using the formula for NPV, we get:

NPV A = ($28 million / (1.09)^1) + ($28 million / (1.09)^2) + ($28 million / (1.09)^3) + ($28 million / (1.09)^4) + ($28 million / (1.09)^5) - $100 million

Similarly, Plane B's NPV is calculated over 10 years. Since Shao Airlines plans to serve the route for only 10 years, it means Plane A will have to be purchased twice. Therefore, a similar NPV formula applies, but for 10 years and accounting for the double cost:

NPV B = 2 × [($27 million / (1.09)^1) + ($27 million / (1.09)^2) + ... + ($27 million / (1.09)^10)] - 2×$132 million

The project with the higher NPV should be accepted, and its NPV relative to the alternative represents the value increase for the company.

Learn more about Net Present Value here:

brainly.com/question/32720837

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The workers at State Hospital, a public sector employer, and Acme Inc, a private employer, are subject to speech censorship and arbitrary job termination. Constitutional issues are present only for the State Hospital workers.TrueFalse

Answers

Answer:

The workers at State Hospital, a public sector employer, and Acme Inc, a private employer, are subject to speech censorship and arbitrary job termination. Constitutional issues are present only for the State Hospital workers is a TRUE statement.

Explanation:

  • The State Hospital is owned and supervised directly by the state government, whereas, the organization named Acme Inc, is privately owned.
  • In a state-owned entity, the state government is the authority that has the final say which is based on the Constitution.
  • Hence, the arbitration done in the state hospital issues would also include Constitutional issues.
  • Whereas, the same would not be the case with the privately owned organization.
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