Question

Moriah’s Candle Company manufactures candles. The company buys wax in 45-Kilogram containers that cost $17 each....

Moriah’s Candle Company manufactures candles. The company buys wax in 45-Kilogram containers that cost $17 each. The company uses 25,000 containers per year, and usage occurs evenly throughout the year. The average cost to carry a 45-Kilogram container in inventory per year is $3, and the cost to place an order is $9. The company works 250 days per year.

​

The lead time is 4 working days and the average rate of usage is 60 containers per day. What is the reorder point?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Annual demand (D) = 25000
Carrying cost perunit per annum (C ) = $3.00
Ordering cost per order (O) = 9 per order
EOQ = (2DC / O)^2
(2*25000*3/9)^2 = 129 units
Reorder Point = Reorder qty (EOQ) + Lead time consumption
129 units + (Lead time*Average consumption per day)
129 + (4*60) = 369 units
Answer is 369 units
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Maria's Candle Company manufactures candles. The company buys wax in 45-Kilogram containers that cost $17 each....
Maria's Candle Company manufactures candles. The company buys wax in 45-Kilogram containers that cost $17 each. The company uses 25,000 containers per year, and usage occurs evenly throughout the year. The average cost to carry a 45-Kilogram container in inventory per year is $3, and the cost to place an order is $9. The company works 250 days per year. The economic order quantity (rounded) is a. 1,000 containers. b. 750 containers. c. 45 containers. d. 387 containers. The lead...
Soster makes and sells candles. Each candle uses 0.6 kilograms of wax. Budgeted production of candles...
Soster makes and sells candles. Each candle uses 0.6 kilograms of wax. Budgeted production of candles in units for the next five months is as follows: March April May June July Budgeted Production 20,000 17,000 18,000 15,000 16,000 The company wants to maintain monthly ending inventories of wax equal to 25% of the following month's budgeted production needs. There were 1,300 kilograms of wax on hand on March 31 and 900 kilograms at March 1. The cost of wax is...
COST ACCOUNTING - COST ESTIMATION AND MATERIALS CONTROL Pluto Company has developed the following data to...
COST ACCOUNTING - COST ESTIMATION AND MATERIALS CONTROL Pluto Company has developed the following data to assist in controlling one of its materials inventory items EOQ 1,000 liters Average daily use 100 liters Maximum daily use 120 liters Working days per year 250 days Safety stock 140 liters Cost of carrying inventory P1 per liter per year Lead time 7 days What is the reorder point? What is the average inventory? what is the maximum inventory assuming normal lead time...
A company manufactures hair dryers. It buys some of the components, but it makes the heating...
A company manufactures hair dryers. It buys some of the components, but it makes the heating element, which it can produce at the rate of 800 per day. Hair dryers are assembled daily, 250 days a year, at a rate of 300 per day. Because of the disparity between the production and usage rates, the heating elements are periodically produced in batches of 2,000 units. a. Approximately how many batches of heating elements are produced annually? b. If production on...
Problem 9A-5 Economic Order Quantity; Safety Stock; Just-in-Time Purchasing Impact [LO6] Imagine It manufactures 3D printers...
Problem 9A-5 Economic Order Quantity; Safety Stock; Just-in-Time Purchasing Impact [LO6] 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...
Inventory Management 1. Ayo is the Purchasing Officer for a company that assembles desktop computers. The...
Inventory Management 1. Ayo is the Purchasing Officer for a company that assembles desktop computers. The computers come with 4 to 6 USB ports. The annual demand for the computers is 600 units. The cost of each computer is $1700, and the inventory carrying cost is estimated to be 10% of the cost of each computer. Ayo has made a study of the costs involved in placing an order and has concluded that the average ordering cost is $50.00 per...
On Jan 1 ’07 SSS buys 100 US Treasury Bonds (face value $1000 each) for the...
On Jan 1 ’07 SSS buys 100 US Treasury Bonds (face value $1000 each) for the Trading Portfolio.   The bonds carry an annual interest coupon of 4% paid semiannually Jan 1 and July 1. Journalize the purchase. On July 1 the bonds pay interest. Journalize the receipt of the interest payment. On Aug 1, SSS sells 50 of the bonds at 98 On December 31 SSS makes an adjusting entry for accrual of interest to be received January 1 2008....
Scenario Pigs R Us is a second generation, family-owned Richmond-based company with about 400 employees. It...
Scenario Pigs R Us is a second generation, family-owned Richmond-based company with about 400 employees. It slaughters, manufactures, and sells pork food products.  Pigs R Us (PRU) is a low-tech, hands-on, “bricks and mortar” type of company with solid brand recognition, an impeccable reputation for high quality and ethical standards. The processes used in manufacturing are with the highest ISO20002 standards, and the plant is maintained immaculately. The personnel are comprised of an older work force (average employee age is late...
Scenario Pigs R Us is a second generation, family-owned Richmond-based company with about 400 employees. It...
Scenario Pigs R Us is a second generation, family-owned Richmond-based company with about 400 employees. It slaughters, manufactures, and sells pork food products.  Pigs R Us (PRU) is a low-tech, hands-on, “bricks and mortar” type of company with solid brand recognition, an impeccable reputation for high quality and ethical standards. The processes used in manufacturing are with the highest ISO20002 standards, and the plant is maintained immaculately. The personnel are comprised of an older work force (average employee age is late...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how the firms resources incompetencies support the given pressures regarding costs and local responsiveness. Describe entry modes have they usually used, and whether they are appropriate for the given strategy. Any key issues in their global strategy? casestudy: Atlanta, June 17, 2014. Sea of Delta employees and their families swarmed between food trucks, amusement park booths, and entertainment venues that were scattered throughout what would...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT