Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION 4 A company makes go-karts produces on average 450g-karts a month i buys the tires for gokarts from a supplier at a cost of

image text in transcribed
QUESTION 4 A company makes go-karts produces on average 450g-karts a month i buys the tires for gokarts from a supplier at a cost of $30 per tire. The company's inventory carrying costs estimated to be of cost and the ordering is 570 per order 1 Calculate the EOQ in this problem (0.2) 2 What is the number of orders per year? (0.2) 3 Compute the average annual ordering cost (0.2) 4 Compute the average inventory (0.2) 5. What is the average annual carrying cost? (0.2) 6 Compute the total cost (0.4) 7 Knowing the demand for the go-karts, and having a lead time for the tires of 5 working days, what should we use as reorder point? For next time asume 30 working days (04) 8. Assume that the demand was actually higher 40% than estimated. What will be the actual annual total cost? (0.4) 9. Now the supplier offers a discount depending on the quantity of tires purchased at each order. The proposal is described in the table below. Ordering costs remains the same and inventory carrying costs are 10% of the price What order quantity will minimize the total inventory cost? (0.5) b What will be the new annual total costs? (0.5) Save and Submit to save and submit Click Save All Answers to save all answers. Save All Ant

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_2

Step: 3

blur-text-image_3

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

Wiley Federal Government Auditing Laws Regulations Standards Practices And Sarbanes Oxley

Authors: Cornelius E. Tierney, Edward F. Kearney, Roldan Fernandez, Jeffrey W. Green, Kearney & Company

1st Edition

0471740489, 978-0471740483

More Books

Students also viewed these Accounting questions