The Company produces laser printers. Standards indicate that one worker can assemble 10printers per day. It costs
Question:
The Company produces laser printers. Standards indicate that one worker can assemble 10printers per day. It costs about $400to produce a printer. The company figures it costs $5 to hold one printer in inventory for one month. Workers earn $1200 per month and can be hired for $750 each; firing a worker costs $1000. Currently, there are 5 workers in the company and 100printers in the inventory.
a. Develop a minimum inventory plan. What is the total cost?(15points)b. Develop a constant work force plan with no backorders. What is the total cost?
2. Demand for a certain product is 10000 units. Company can purchase them for $50per unit. Purchase order cost is $30 per lot. The company can also produce them for $25 per unit. The production rate is 15000units per year. Setup cost is $100.Inventory holding cost is $10per unit per year. Calculate the total cost with economic order quantity (EOQ) and total cost with economic production quantity (EPQ). Should the company produce or buy the item? Shortages are not allowed.
3. Michael is a purchasing manager of a shoe manufacturing company. He purchases a certain raw material from different suppliers. The demand is 5000 for the raw material a year, and no shortages are allowed. His major supplier gave him the following all-units discount price schedule: Michael knows that issuing an order costs him $100, and the inventory holding cost is $0.20per unit per year. What is the economic order quantity (EOQ)?What is the total cost with EOQ determined?
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen