A stainless steel knife set is one item it stocks. Demand (2,400 sets per year) is relatively stable over the entire year. Whenever new stock is ordered, a buyer must ensure that numbers are correct for stock on-hand and then phone in a new order. The total cost involved to place an order is about $5. RW figures that holding inventory in stock and paying for interest on borrowed capital, insurance, and so on, add up to about $4 holding cost per unit per year.Analysis of the past data shows that the standard deviation of demand from retailers is about four units per day for a 365-day year. Lead time to get the order is seven days.What is the economic order quantity?
Answers
Answer:
Annual demand (D) = 2,400 sets
Holding cost (H) = $4
Ordering cost (Co) = $5
EOQ = √2 x 2,400 x $5
$4
EOQ = 77 units
Explanation:
Economic order quantity(EOQ) is the square root of 2 multiplied by annual demand and ordering cost per order divided by the holding cost per item per annum. EOQ is the quantity of stock that is bought each time a replenishment order is placed.
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Your best friend wants to borrow $2000 from you today for an emergency purchase they need to make that requires a cash payment. They promise to pay you back $1000 in 1 year (i.e. 12 months) and then pay you $1100 in two years (i.e. in 24 months). You would have to remove the money from your stock investment account which is earning on average a return of 5% (i.e. the effective yearly interest rate you are getting on your money is 0.05). Required:a. Is this a fair deal for you? Justify your answer with an engineering economics analysis and discussion of the situation by calculating the Net Present Value (NPV) for the scenario. b. Draw a Cash Flow Diagram for this situation.
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Answer:
one sec i can help
Explanation:
Answers
Answer: Dwayne's investment will be worth $89,961.02 after the last annuity payment is made.
Since Dwayne contributes $4700 at the beginning of each year, we need to calculate the future value of an annuity due.
We use this formula for our calculations:
Substituting the values we get,
Optimal order quantity pounds
b. How frequently should the company order cotton? (Round your answer to 2 decimal places.)
Company orders once every months
c. Assuming that the first order is needed on 1-Jul, when should SYM place the order?
17-Jun
1-Jul
15-Jul
d. How many orders will SYM place during the next year? (Round your answer to 2 decimal places.)
Number of orders times
e. What is the resulting annual holding cost? (Round your answer to the nearest whole number.)
Annual holding cost $ per year
f. What is the resulting annual ordering cost?
Annual ordering cost $
g. If the annual interest cost is only 5 percent, how will it affect the annual number of orders, the optimal batch size, and the average inventory?
Answers
Answer:
Kindly check explanation
Explanation:
Given the following :
Price per pound = $1.55
Raw material required = 0.75 pound
Transport cost by sea = $0.70
Monthly demand for each of the three colors = 3487
EOQ = √2DS / H
D = 3 * 12 * 3487 * 0. 75 = 94149
Total cost of purchase = 1.55 + 0.70 = 2.25
Setup cost (S) = $186
Holding cost = 32% * 2.25 = 0.72
EOQ = √(2*94149*186) / 0.72
= 6974.50
b. How frequently should the company order cotton?
Annual demand / EOQ
94149 / 6974.50
= 13.50 ;
12 months / 13.50 = 0.89 month
c. Assuming that the first order is needed on 1-Jul, when should SYM place the order?
Since lead time is 2 weeks, order should be made 2 weeks before : 17th June
d. How many orders will SYM place during the next year? (Round your answer to 2 decimal places.)
Annual demand / EOQ
94149 / 6974.50
= 13.50 times
e. What is the resulting annual holding cost? (Round your answer to the nearest whole number.)
Holding cost * EOQ /2
0.75 * (6974.50/2) = 2615.44
f. What is the resulting annual ordering cost?
Annual ordering cost $
Ordering cost * number of orders
$186 * 13.50 = $2,511
B. for only the long-run.
C. for both the short-run and the long-run.
D. for only the short-run.
Answers
Answer:
The correct option is D
Explanation:
Empirical evidence is the evidence which is defined as the information received through the senses, specifically by documentation as well as monitoring of patterns and behavior via experimentation.
APC stands for Average Propensity to Consume is the one which measures the percentage of income spent instead of savings. And it is evaluated by dividing the average household consumption by average household income.
So, if the empirical evidence states that the APC is falling or decreasing then it is only for short- run or short- period.
Answer:
D. for only the short-run.
Answers
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