Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A firm requires 120,000 units (D) over a 200-day production period and is placing 2-orders of equal quantity (Q). Inventory is used at a constant

image text in transcribed
A firm requires 120,000 units (D) over a 200-day production period and is placing 2-orders of equal quantity (Q). Inventory is used at a constant daily rate. Ordering and Holding Costs are accounted for at end of the production period. Ordering Costs (OC) are $750/order and Holding Costs (HC) are $5.00/unit based on average inventory. The price per unit of inventory is $275 (C). The firm pays for the inventory 30 days after delivery. The firm's cost of capital is 10% (1). For the inventory system, the SECOND order is delivered att and payment for that order is made att Total Cost - Ordering Costs + Holding Costs + Item Cost Total Cost - OC * (D2)] + [HC * (02)] + (CD) Delivered At Order Number Order Quantity Cou Payment Due A. PV PV 60,000 30 0.991845 2 51.500 200 ORDERING COSTS MOLDING COSTS OLOS 51.422 200, 230 100. 130 30.60 30,200

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The No Nonsense Guide To Globalization

Authors: Wayne Ellwood

1st Edition

1904456448, 190652355X, 9781906523558

More Books

Students also viewed these Finance questions