Question

Clothing Company manufactures uniforms. A heavy duty fabric is one part that the company orders from...

Clothing Company manufactures uniforms. A heavy duty fabric is one part that the company orders from an outside supplier. Information pertaining to the strap is as follows: Economic Order Quantity 4,300 units Average Daily Usage 420 Maximum Daily Usage 490 Lead Time 9 days

PART A What is the reorder point assuming no safety stock is carried?

PART B What is the reorder point assuming that safety stock is carried?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

In the question, it is given that:

1. Economic Order Quantity 4,300 units

2. Average Daily Usage 420

3. Maximum Daily Usage 490

4. Lead Time 9 days

PART A: The reorder point assuming no safety stock is carried = Lead time Demand

Lead time demand = Lead time x Average daily sales

= 9*420

= 3,780 units

Answer A : 3,780 units

PART B: The reorder point assuming that safety stock is carried = Reorder level + safety stock

Safety stock =  (Maximum Daily Usage - Average Daily Usage) × Lead Time

= (490-420)*9 = 630 units

Answer B = 3,780 + 630 = 4,410 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
Bombair Retail Store orders accent chairs 10 times per year from Axium Manufacturing. The reorder point...
Bombair Retail Store orders accent chairs 10 times per year from Axium Manufacturing. The reorder point without safety stock is 100 chairs. The following demand probabilities during the lead time is shown in the table: Demand During Lead Time Probability 0 0.1 100 0.1 200 0.2 300 0.4 400 0.2 The carrying cost is $30 per unit per year and the cost of a stockout is $70 per chair per year. How much safety stock should be carried?    [9...
ABC Company annually buys 600,000 units of Part B. The EOQ is 12,000 units. The ABC...
ABC Company annually buys 600,000 units of Part B. The EOQ is 12,000 units. The ABC Company’s average usage equals 2,000 units/day (600,000 units/300 working days) and the average lead-time for ordering Part A is 6 days. 48.  What is the reorder point with no variability in either usage or lead-time? a. 11,000 units b. 12,000 units c. 13,000 units d. 14,000 units 49.  What is the level of safety stock if usage could be as high as 2,200 units/day? a. 1,200...
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...
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 manufacturing company keeps stock of replacement parts for its critical equipment. The lead time for...
A manufacturing company keeps stock of replacement parts for its critical equipment. The lead time for a rare $500 part is 2 months. The maintenance manager keeps close track of the inventory of these parts and places a new order whenever the stock reaches a certain threshold or reorder point. When they order, they place orders of 20 units at a time because the supplier has to make a special production run for it. From past history they estimate that...
Assume you are the management accountant for the Foleo Group. Tracey Chen, the CFO, has called...
Assume you are the management accountant for the Foleo Group. Tracey Chen, the CFO, has called you into a meeting, to discuss the performance of the Warehouse Manager of the Foleo Fones business unit in managing his inventory stocks. After his last meeting with the Production Manager, Allan Raymond, the Business Unit GM, has supplied Tracey with below data relating to the inventory management practices for the current year. Tracey asks you analyse this data and before her Board meeting...
Moore Plumbing Supply Company Capital Structure Mort Moore founded Moore Plumbing Supply after returning from duty...
Moore Plumbing Supply Company Capital Structure Mort Moore founded Moore Plumbing Supply after returning from duty in the South Pacific during World War II. Before joining the armed forces, he had worked for a locally owned plumbing company and wanted to continue with that type of work once the war effort was over. Shortly after returning to his hometown of Minneapolis, Minnesota, he became aware of an unprecedented construction boom. Returning soldiers needed new housing as they started families and...
Using the model proposed by Lafley and Charan, analyze how Apigee was able to drive innovation....
Using the model proposed by Lafley and Charan, analyze how Apigee was able to drive innovation. case:    W17400 APIGEE: PEOPLE MANAGEMENT PRACTICES AND THE CHALLENGE OF GROWTH Ranjeet Nambudiri, S. Ramnarayan, and Catherine Xavier wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT