Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Need help please Imagine It manufactures 3D printers and purchases one of the components used in the printers from a supplier in the U.S. Imagine

Need help please image text in transcribed
image text in transcribed
image text in transcribed
Imagine It manufactures 3D printers and purchases one of the components used in the printers from a supplier in the U.S. Imagine It uses 4.000 of these components per year at a cost of $160 each The components are used evenly in the production process throughout a 360-day production year. The company estimates that it costs $20 to place a single purchase order and about $100 to carry each component in inventory for a year since it must be stored in a climate controlled unit. Delivery from the supplier generally takes two days, but it can take as many as six days. The days of delivery time and the percentage of their occurrence are shown in the following tobulation: Delivery Time Percentage of Occurrence 2 75 10 5 Required: 1. Compute the EOQ, 40 como 2. Assume that the company is willing to assume a 15% risk of being out of stock. What is the safety stock? The reorder point? Safety stock Reorder point 11 components 33 components 3. Assume that the company is willing to assume only a 5% risk of being out of stock. What is the safety stock? The reorder point? Safely stock Reorder point 33 components components 4. Assume a 5% stock-out risk as stated in (3) above. What is the total cost of ordering and carrying inventory for one year? Total cost Carrying cost of inventory 5. Refer to the original data. Assume that the company decides to adopt JIT purchasing policies. This change allows the company to reduce its cost of placing a purchase order to only $11.25. Compute the new EOQ BOO components

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

More Books

Students also viewed these Accounting questions