Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Appendix: EOQ Diane Delbert operates a health food bakery that uses a special type of ground flour in one of its high-margin products. The

image text in transcribed

Appendix: EOQ Diane Delbert operates a health food bakery that uses a special type of ground flour in one of its high-margin products. The bakery operates 365 days a year. Delbert finds that she seems to order either too much or too little special flour and asks for your help. After some discussion, you find that she has no idea of when or how much to order. An examination of her records and answers to further questions reveal the following information: Annual usage of special flour (pounds) Average number of days delay between initiating and receiving an order 5,950 12 Estimated cost per order $32.00 Estimated annual cost of carrying a pound of special flour in inventory $0.50 a. Calculate the economic order quantity for flour. Note: Round your answer to the nearest whole pound. 873 pounds b. Assume that Delbert desires a safety stock cushion of seven days' usage. Calculate the appropriate order point. Note: Do not round until your final answer. Note: Round your final answer to the nearest whole pound.

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

Cost Accounting A Managerial Emphasis

Authors: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan

14th Global Edition

978-0273753872, 0273753878

More Books

Students also viewed these Accounting questions