Faber Manufacturing, Inc., of St. Paul, Minnesota has an economic order quantity considering backordering of 763, a maximum backordering quantity in units of 480, annual holding cost/unit = $3.5; lead time = 1.4 month (the firm operates 12 months per year). If the firm's customers do not object to backordering and each unit backordered costs $ 4.5/year, then: What is the maximum inventory level?

Faber Manufacturing, Inc., of St. Paul, Minnesota has an economic order quantity considering backordering of 763, a maximum backordering quantity in units of 480, annual holding cost/unit = $3.5; lead time = 1.4 month (the firm operates 12 months per year). If the firm's customers do not object to backordering and each unit backordered costs $ 4.5/year, then: What is the maximum inventory level?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 7E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...

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Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the economic order quantity. 2. Compute the ordering, carrying, and total costs for the EOQ. 3. How much money does using the EOQ policy save the company over the policy of purchasing 4,000 plastic housing units per order?
Assume Wyteboard Corp. markers uses 1,440,000 gallons of ink each year. Assume Palmer will order the ink at a rate of P2 per gallon plus a fixed cost of P100 per order. At cost, the firm's carrying cost is 20% of the inventory value. What is Wyteboard's minimum costs of ordering and holding inventory?Please provide a solution
Assume Wyteboard Corp. markers uses 1,440,000 gallons of ink each year. Assume Palmer will order the ink at a rate of P2 per gallon plus a fixed cost of P100 per order. At cost, the firm's carrying cost is 20% of the inventory value. What is Wyteboard's minimum costs of ordering and holding inventory? SHOW THE ANSWER IN A GOOD ACCOUNTING FORM
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