InstaCam sells 1200 cameras per year, and the demand pattern throughout the year is very steady....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
InstaCam sells 1200 cameras per year, and the demand pattern throughout the year is very steady. The store orders its cameras from a regional supplier at a cost of $250 each. Each time an order is placed, an ordering cost of $125 is incurred. Holding costs are about 8.33% of the cost of the item annually. Currently, InstaCam orders cameras every quarter - ie, in quantities of 300 units. 1. For the current ordering policy (10 pts) 2. What is the average inventory held? (2 pts) 3. What is the number of orders placed annually? (4 pts) 4. What is the total annual cost of holding and ordering? (4 pts) 5. What is the economic ordering quantity - that minimizes the sum of holding and ordering costs? (5 pts) 6. For the EOQ (12 pts) 1. What is the average inventory held? (2 pts) 2. What is the number of orders placed annually? (4 pts) 3. What is the number of days between orders? Assume InstaCam works 300 days a year. (2 pts) 4. What is the total annual cost of holding and ordering? (2 pts) 5. How much does InstaCam save by switching from the current order quantity to the EOQ? (2 pts) 7. Suppose the supplier has a lead time of 5 days. What reorder level should InstaCam use? (3 pts) 8. If InstaCam places an order of at least 150 cameras each time it orders, the supplier will reduce the price of each camera by $5. Should InstaCam use an order quantity of 150 units in order to get this discount? Calculate all costs and savings and make a recommendation. (10 pts) InstaCam sells 1200 cameras per year, and the demand pattern throughout the year is very steady. The store orders its cameras from a regional supplier at a cost of $250 each. Each time an order is placed, an ordering cost of $125 is incurred. Holding costs are about 8.33% of the cost of the item annually. Currently, InstaCam orders cameras every quarter - ie, in quantities of 300 units. 1. For the current ordering policy (10 pts) 2. What is the average inventory held? (2 pts) 3. What is the number of orders placed annually? (4 pts) 4. What is the total annual cost of holding and ordering? (4 pts) 5. What is the economic ordering quantity - that minimizes the sum of holding and ordering costs? (5 pts) 6. For the EOQ (12 pts) 1. What is the average inventory held? (2 pts) 2. What is the number of orders placed annually? (4 pts) 3. What is the number of days between orders? Assume InstaCam works 300 days a year. (2 pts) 4. What is the total annual cost of holding and ordering? (2 pts) 5. How much does InstaCam save by switching from the current order quantity to the EOQ? (2 pts) 7. Suppose the supplier has a lead time of 5 days. What reorder level should InstaCam use? (3 pts) 8. If InstaCam places an order of at least 150 cameras each time it orders, the supplier will reduce the price of each camera by $5. Should InstaCam use an order quantity of 150 units in order to get this discount? Calculate all costs and savings and make a recommendation. (10 pts)
Expert Answer:
Answer rating: 100% (QA)
Lets calculate the various parameters for both the current ordering policy and the Economic Ordering Quantity EOQ for InstaCam Current Ordering Policy ... View the full answer
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Posted Date:
Students also viewed these general management questions
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Bland Manufacturing is a leader in custom saddles and tack. It was started by Don Bland in McPherson, Kansas. Drawing on his family heritage of cowboys and his education in leather tanning, he...
-
. A vertical pole that is 2 meters tall casts a shadow that is 1.5 meters long. Nearby, at the same time, another vertical pole casts a shadow that is 6.5 meters long. How tall is this pole? a. Make...
-
Construct a cumulative relative frequency histogram. Use the following information to answer question. Suppose a class of high school seniors had the following distribution of SAT scores in English....
-
Helium gas at 25C and 4 bars is stored in a spherical Pyrex container of 200-mm inside diameter and 10-mm thickness. What is the rate of mass loss from the container?
-
The antisymmetrization operator A^ is defined as the operator that antisymmetrizes a product of n one-electron functions and multiplies it by (n!)-1 / 2, For n = 2, (a) For n = 2, express A^ in terms...
-
A parallel-plate capacitor with air between the plates and plate separation distance \(d\) is connected to a battery that maintains a potential difference \(V_{\text {batt }}\) between the plates....
-
Capriati Corporation commenced operations in early 2012. The corporation incurred $60,000 of costs such as fees to underwriters, legal fees, state fees, and promotional expenditures during its...
-
All work must be shown on every facet of the solution. This includes a timeline with cashflows, timing and rates clearly laid out and formulas (in pure form, not in the calculator or excel form). A...
-
Washington State Fisheries, Incorporated, processes salmon for various distributors. Two departments, processing and packaging, are involved. Data relating to tons of salmon sent to the processing...
-
Suppose that Ariel expects a significant real depreciation of MXN against EUR; specifically, the exchange rate is expected go from MXN 15.99/EUR in Year 0 to MXN 22/ EUR in Year 1 and MXN 25/ EUR in...
-
The structure that converts light into usable neural messages is called the __________.
-
The purpose of the eardrum is to protect the sensitive nerves underneath it. It serves no purpose in actual hearing. True or false?
-
Which of the following statements are true? A. A two-node RAC database consists of two copies of the database files. B. A two-node RAC database consists of one shared copy of the database files. C. A...
-
One of your instructors has complied with your urgent request for a letter of recommendation and has given you an enthusiastic endorsement. Regardless of the outcome of your application, you owe...
-
__________theory states that there are three types of cones in the retina, each of which responds primarily to a different color.
-
Describe the Phong shading method discussing how it integratesin the modern graphics pipeline, its advantages anddisadvantages.
-
What impact has the Internet had on the globalization of small firms? How do you think small companies will use the Internet for business in the future?
-
Vulcan Materials Company, a member of the S&P 500 Index, is the nations largest producer of construction aggregates, a major producer of asphalt mix and concrete, and a leading producer of cement in...
-
iRobot designs and manufactures robots for consumer, commercial, and military use. For the fiscal year ended January 2, 2016, the company reported the following on its balance sheet and income...
-
Often the application of the acquisitions method entails establishing one or more acquisition reserves. Define an acquisition reserve, provide several examples of such reserves, and discuss how the...
-
Go to the library or the Internet and, for a particular year, put together a data set of profits in agriculture in different geographical units of your state or country (e.g., counties of a U.S....
-
A very simple version of the normative model described in the text involves a simple economic growth process converging to a steady-state, where values do not change over time. \({ }^{14}\) A simple...
-
Suppose we have a small inhabited island with three residents and a volcano that generates air pollution. Two people live upwind of the volcano and one person lives downwind. For \(\$ 21,000\) we can...
Study smarter with the SolutionInn App