The order cost per order of an inventory is OMR. 60 with an annual carrying cost of OMR. 4 per unit. The annual demand is 12000 units. Calculate: Economic Ordering Quantity, Number of Orders per year and Ordering cost per year. a. 500 units, 20 Orders and 1200 OMR b. 480 units, 20 Orders and 1500 OMR c. 400 units, 20 Orders and 1800 OMR d. 600 units, 20 Orders and 1200 OMR

The order cost per order of an inventory is OMR. 60 with an annual carrying cost of OMR. 4 per unit. The annual demand is 12000 units. Calculate: Economic Ordering Quantity, Number of Orders per year and Ordering cost per year. a. 500 units, 20 Orders and 1200 OMR b. 480 units, 20 Orders and 1500 OMR c. 400 units, 20 Orders and 1800 OMR d. 600 units, 20 Orders and 1200 OMR

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 2CE: Sterling Corporation has an EOQ of 5,000 units. The company uses an average of 500 units per day. An...

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Sterling Corporation has an EOQ of 5,000 units. The company uses an average of 500 units per day. An order to replenish the part requires a lead time of five days. Required: 1. Calculate the reorder point, using Equation 20.3. 2. Graphically display the reorder point, where the vertical axis is inventory (units) and the horizontal axis is time (days). Show two replenishments, beginning at time zero with the economic order quantity in inventory. 3. What if the average usage per day of the part is 500 units but a daily maximum usage of 575 units is possible? What is the reorder point when this demand uncertainty exists?
The following information relates to a company . The fixed cost per order is ksh 1,500 The purchase price per unit is ksh 35 The carrying costs per unit of inventory 10% of the purchase price The annual demand is 5,000units Calculate theEconomic Order Quantity Total number of orders in a year Leadtime
A company wishes to establish an EOQ for an item for which the annual demandis $800,000, the ordering cost is $32, and the cost of carrying inventory is 20%.Calculate the following:a. The EOQ in dollars.b. Number of orders per year.c. Cost of ordering, cost of carrying inventory, and total cost.d. How do the costs of carrying inventory compare with the costs of ordering?
2. Hamid Company consumes inventory of 100,000 units of components per year. The carrying cost per unit is RO 3.50. The fixed order cost is RO 20 per order. The production planning is 365-day year. The delivery time is three days. a. Calculate and interpret the Economic Order Quantity (EOQ). b. At what inventory level should Hamid Company place another order. Interpret.
The annual inventory requirement at the C &E Enterprises is P2,500 units. Each inventory item has a value of P5,000. Ordering cost is P50.00. Carrying cost is 20% of average inventory. Find the following: a. Optimal number of order per year b. Economic order quantity c. Annual carrying cost d. Annual Ordering cost e. Total annual inventory cost
The following data relates to component L512: Ordering costs $100 per order Inventory holding costs $8 per unit per annum Annual demand 1,225 units What is the economic order quantity (to the nearest whole unit)?
An entity uses the economic order quantity model and wishes to discover how many orders it need to place each year in order to meet its annual demand of 50,000 units. The cost of placing an order is £5 and the cost of holding a unit of inventory for year is £6. a. 177 b. 180 c. 174 d. 144
The annual inventory requirement at the C &E Enterprises is P2,500 units. Each inventory item has a value of P5,000. Ordering cost is P50.00. Carrying cost is 20% of average inventory. a. Optimal number of order per year b. Economic order quantity c. Annual carrying cost d. Annual Ordering cost e. Total annual inventory cost
Compute for EOQ for Company with Annual Usage of 32,000 units in 360 working days, Ordering cost of P1,200 every order and carrying cost of P1.50 per unit. How much is the Annual Carrying Cost? How much is the Annual Ordering Cost? How much is the Total Inventory Cost?
Calculate EOQ from the following details: Consumption per month is 2,000 units, ordering cost is RO 10 per order, purchase price is RO 100 per unit and annual carrying cost is 10%. a. 283 units b. 310 units c. 245 units d. 219 units
An organization implements a constant order quantity inventory system. The setup (procurement) cost per transaction: $58 The annual demand in units: 2500 The cost of each inventory unit: $10 The annual holding cost as a percentage of unit inventory cost: 30% Determine the optimal order quantity rounded to the nearest whole unit.
The monthly consumption of wheat is 50,000 kgs forNabil Company. The per unit (kg) cost is OMR 0.550,the ordering cost is OMR 80 per order and thecarrying cost is 20% of the cost of inventory. Theeconomic order quantity is;a. 1321b. 29542c. 2954d. 13211