(Solution) 12/8/12 Chapter: Problem: 28 3 The Following Inventory Data Have Been Established For The Alder Corporation: (1) Orders Must Be Placed In Multiples... | Snapessays.com


(Solution) 12/8/12 Chapter: Problem: 28 3 The following inventory data have been established for the Alder Corporation: (1) Orders must be placed in multiples...


1.) Answer the following problems in Excel 2.) Provide "detail" analysis for each 3 questions (4 sentences each)12/8/12

 

Chapter:

 

28

 

Problem:

 

3

 

The following inventory data have been established for the Alder Corporation:

 

(1) Orders must be placed in multiples of 100 units.

 

(2) Annual sales are 338,000 units.

 

(3) The purchase price per unit is $3.

 

(4) Carrying cost is 20 percent of the purchase price of goods.

 

(5) Cost per order placed is $24.

 

(6) Desired safety stock is 14,000

 

units; this amount is on hand initially.

 

(7) Two weeks are required for delivery.

 

Note:

 

The red arrows in the upper right hand of a cell indicates a helpful comment.

 

Click on the cell to see the comment.

 

INPUT DATA:

 

Fixed order cost (F)

 

$24

 

Annual unit sales (S)

 

338,000

 

Carrying cost (C)

 

20%

 

Purchase price (P)

 

$3

 

Desired safety stock

 

14,000

 

Order multiple

 

100

 

Weeks for delivery

 

2

 

Ordering quantity (part d)

 

4,000

 

Important note:

 

Make your formulas refer to the cells in the input data section.

 

a.

 

What is the EOQ?

 

EOQ =

 

b.

 

How many orders should the firm place each year?

 

Optimal number of orders =

 

Weekly usage =

 

Days between orders =

 

Orders in transit =

 

Goods in transit =

 

-

 

Optimal reorder point =

 

d.

 

Calculate the total costs of ordering and carrying inventories if the order quantity is:

 

d.

 

(1) 4,000 units.

 

d.

 

(2) 4,800 units.

 

d.

 

(3) 6,000 units.

 

d.

 

(4) The EOQ number of units.

 

number of units

 

Tot inv. cost @

 

4,000

 

Tot inventory cost @ EOQ

 

e.

 

What are the

 

EOQ and total inventory costs if

 

e. (1) Sales increase to 500,000 units?

 

e. (2) Fixed order costs increase to $30 while sales remain at 338,000 units.

 

e. (3) Purchase price increases to $4?

 

Leave sales and fixed costs at original values.

 

EOQ

 

Tot inventory cost @ EOQ

 

c.

 

At what inventory level should a reorder take place?

 

[Hint:

 

Reorder point = Safety Stock + (Weeks to deliver x Weekly

 

usage) - Goods in transit.

 

Total

 

Inventory

 

Cost

 

Refer to the formulas you

 

developed in parts (a)

 

through (d) and change the

 

inputs in the input section.

 

CP

 

FS

 

2

 

EOQ

 

?

 


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This question was answered on: May 23, 2022

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