Question: please help answer these questions! (they all go together)! 3 Inventory Cost and Production Cost A manufacturer of copy machines sells 12,000 units annually of
please help answer these questions! (they all go together)!
3 Inventory Cost and Production Cost A manufacturer of copy machines sells 12,000 units annually of its large office copier (Model X), and 15,000 units annually of its smaller office copier (Model Y), for a total of A = 27,000 units. Each printer has a unique component which holds the print cartridge. Management is now considering a single component to replace the two different components currently used for the copiers. The specifications for the new component are: Fixed setup cost (s) $300.00 Manufacturing cost (c) $12.00 Holding cost (h) 25% of manufacturing cost How many units per batch should the company produce (the EOQ)? O a. 2,324 units per batch O b. 901 units per batch O c. 2,846 units per batch O d. 805 units per batch What is the order frequency (average number of orders placed per year) under the EOQ? O a. 34 orders per year O b. 12 orders per year O c. 10 orders per year O d. 30 orders per year What is the total (annual) inventory cost of the new component under the EOQ? O a. $9,439.28 O b. $5,692.10 O c. $6,971.37 O d. $8,049.84 Consider the total cost formula from class TC= IC +PC, where PC = CA, which says that "total cost is equal to total inventory cost plus total production cost." What is TC for the new component? O a. $333,439.28 O b. $332,049.84 O c. $329,692.10 O d. $330,971.37 The operations manager claims there is a savings to be gained from using the new component since the company can pool the demand of the two products. Currently, the total annual cost (that is, the total production cost plus total inventory cost for the two types of components) is $331,000. Using this logic, is the operations manager's claim correct that there is a savings from using the new component? O a. yes because TC is less than $331,000 O b. no because TC is greater than $331,000


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