Good-Brains Company sells kitchen supplies and housewares. Lava stone is used in production of mortars and pestles used in the making of guacamole and is purchased from external suppliers. Each year, 8,000 pounds of Lava stones are used; it is used evenly at the rate of 30 pounds per day. However, some days, as many as 35 pounds are used. It takes Good-Brains 5 days from the time of order to the time of arrival of the order and is currently purchased in lots of 500 pounds. It costs Good-Brains GH¢5 to place the order, and carrying cost is GH¢2 per pound per year. Calculate the total annual inventory cost Calculate the economic order quantity (EOQ) and the total annual inventory cost using the EOQ policy How much is saved per year using the EOQ verses an order size of 500 pounds? Is it prudence for the company to adopt the EOQ policy Compute the safety stock and reorder point with safety stock. explain three reasons why companies hold stock. Question Two
Good-Brains Company sells kitchen supplies and housewares. Lava stone is used in production of mortars and pestles used in the making of guacamole and is purchased from external suppliers. Each year, 8,000 pounds of Lava stones are used; it is used evenly at the rate of 30 pounds per day. However, some days, as many as 35 pounds are used. It takes Good-Brains 5 days from the time of order to the time of arrival of the order and is currently purchased in lots of 500 pounds. It costs Good-Brains GH¢5 to place the order, and carrying cost is GH¢2 per pound per year. Calculate the total annual inventory cost Calculate the economic order quantity (EOQ) and the total annual inventory cost using the EOQ policy How much is saved per year using the EOQ verses an order size of 500 pounds? Is it prudence for the company to adopt the EOQ policy Compute the safety stock and reorder point with safety stock. explain three reasons why companies hold stock. Question Two
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 26E: Ingles Corporation is a manufacturer of tables sold to schools, restaurants, hotels, and other...
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Good-Brains Company sells kitchen supplies and housewares. Lava stone is used in production of mortars and pestles used in the making of guacamole and is purchased from external suppliers. Each year, 8,000 pounds of Lava stones are used; it is used evenly at the rate of 30 pounds per day. However, some days, as many as 35 pounds are used. It takes Good-Brains 5 days from the time of order to the time of arrival of the order and is currently purchased in lots of 500 pounds. It costs Good-Brains GH¢5 to place the order, and carrying cost is GH¢2 per pound per year.
Calculate the total annual inventory cost
Calculate the economic order quantity (EOQ) and the total annual inventory cost
using the EOQ policy
How much is saved per year using the EOQ verses an order size of 500 pounds? Is
it prudence for the company to adopt the EOQ policy
Compute the safety stock and reorder point with safety stock.
explain three reasons why companies hold stock.
Question Two
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