Question
IM.82 A distributor of industrial equipment purchases specialized compressors for use in air conditioners. The regular price is $55, however, the manufacturer of this compressor
IM.82 A distributor of industrial equipment purchases specialized compressors for use in air conditioners. The regular price is $55, however, the manufacturer of this compressor offers quantity discounts per the following discount schedule: Option Plan Quantity Discount A 1 - 299 0% B 300 - 1,299 0.75% C 1,300+ 1.25% The distributor pays $40 each time it places an order with the manufacturer. Holding costs are negligible (none) but they do earn 11% annual interest on all cash balances (meaning there will be a financial opportunity cost when they put cash into inventory). Annual demand is expected to be 9,500 units.
When there is no quantity discount (Option Plan A, the first row of the schedule listed above), what is the adjusted order quantity? (Display your answer to the nearest whole number.) 354
Based on your answer to the previous question, and based on the annual demand as stated above, what will be the annual ordering costs? (Display your answer to the nearest whole number.) 1072
Using the adjusted order quantity as determined above (two questions back), what will be the average number of units held in inventory? (Display your answer to the nearest whole number.) 177
Using the adjusted order quantity as determined above (three questions back), and assuming a materials cost for the given discount, what will be the annual holding cost? (Display your answer to the nearest whole number.) 1072
Using the adjusted order quantity as determined above (four questions back), and assuming a materials cost for the given discount, what will be the total annual inventory cost? (Display your answer to the nearest whole number.) 524644
When there is a 0.75% discount (Option Plan B, the second row of the schedule listed above), what is the adjusted order quantity? (Display your answer to the nearest whole number.) 356
Based on your answer to the previous question, and based on the annual demand as stated above, what will be the annual ordering costs? (Display your answer to the nearest whole number.) 1068
Using the adjusted order quantity as determined above (two questions back), what will be the average number of units held in inventory? (Display your answer to the nearest whole number.) 178
Using the adjusted order quantity as determined above (three questions back), and assuming a materials cost for the given discount, what will be the annual holding cost? (Display your answer to the nearest whole number.) 1068
Using the adjusted order quantity as determined above (four questions back), and assuming a materials cost for the given discount, what will be the total annual inventory cost? (Display your answer to the nearest whole number.) 520717
When there is a 1.25% discount (Option Plan C, the third row of the schedule listed above), what is the adjusted order quantity? (Display your answer to the nearest whole number.) 1300
Based on your answer to the previous question, and based on the annual demand as stated above, what will be the annual ordering costs? (Display your answer to the nearest whole number.) 292
Using the adjusted order quantity as determined above (two questions back), what will be the average number of units held in inventory? (Display your answer to the nearest whole number.) 650
Using the adjusted order quantity as determined above (three questions back), and assuming a materials cost for the given discount, what will be the annual holding cost? (Display your answer to the nearest whole number.) 3883
Using the adjusted order quantity as determined above (four questions back), and assuming a materials cost for the given discount, what will be the total annual inventory cost? (Display your answer to the nearest whole number.) ???
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started