A building materials manufacturer obtains its bagged cement from a single supplier. Due to a recent...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A building materials manufacturer obtains its bagged cement from a single supplier. Due to a recent increase in the unit price of cement, the company needs to revise their inventory management strategy for this material. Last year, the company sold 2,000 tonnes of this product. It estimates the ordering cost at around 25 pounds each time an order is placed. A tonne of cement costs 60 pounds to purchase, and the company calculates that the annual cost of holding inventory as 20 percent of purchase cost. Your Task ● Currently, the company orders cement in batches of 200 tonnes. 1. Evaluate the total cost of the optimal ordering plan and the order frequency per year. 2. Find the economic order quantity and evaluate its total cost as well as order frequency per year. 3. What assumptions have been made for these calculations? 4. Which of the assumptions you listed are realistic in this case? Which ones are strong assumptions? Once you have completed your analysis, submit it below. Although this activity is not graded, it is an essential part of your learning • Once you have submitted, my feedback on this activity will be available on the following page Complete this activity by Monday before midday (UK time). ● Guidelines CONSTRUCTION CEMAT INC A building materials manufacturer obtains its bagged cement from a single supplier. Due to a recent increase in the unit price of cement, the company needs to revise their inventory management strategy for this material. Last year, the company sold 2,000 tonnes of this product. It estimates the ordering cost at around 25 pounds each time an order is placed. A tonne of cement costs 60 pounds to purchase, and the company calculates that the annual cost of holding inventory as 20 percent of purchase cost. Your Task ● Currently, the company orders cement in batches of 200 tonnes. 1. Evaluate the total cost of the optimal ordering plan and the order frequency per year. 2. Find the economic order quantity and evaluate its total cost as well as order frequency per year. 3. What assumptions have been made for these calculations? 4. Which of the assumptions you listed are realistic in this case? Which ones are strong assumptions? Once you have completed your analysis, submit it below. Although this activity is not graded, it is an essential part of your learning • Once you have submitted, my feedback on this activity will be available on the following page Complete this activity by Monday before midday (UK time). ● Guidelines CONSTRUCTION CEMAT INC
Expert Answer:
Answer rating: 100% (QA)
1 To judge the total cost of the optimal organizing plan and the order frequency occurring we need to calculate the total cost of stock and ordering c... View the full answer
Related Book For
Fundamentals of Hydraulic Engineering Systems
ISBN: 978-0136016380
4th edition
Authors: Robert J. Houghtalen, A. Osman H. Akan, Ned H. C. Hwang
Posted Date:
Students also viewed these general management questions
-
A pump is required for a U.S. fie ld application with the following specifications: a flow rate of I 2.5 cfs (ft 3/ sec) against a head of 95 ft. To design the pump, a model is built with a 6 in....
-
An ac voltage of 24 V is required for a device whose impedance is 12 . (a) What should the turn ratio of a transformer be so the device can be operated from a 120-V line? (b) Suppose the transformer...
-
1. How much work is required for a mechanical hoist to lift a 9000-N automobile to a height of 1.80 m for repairs? 2. A hay wagon is used to move bales from the field to the barn. The tractor pulling...
-
What is the one greatest strength of a pluralistic society? What is the one greatest weakness? Do these characteristics work for or against business?
-
How important is the idea of a social networking site to the creation of Facebook? What other kinds of resources are necessary for Facebook to develop and grow?
-
Using standard electrode potentials, calculate Eocell at 25oC for the following cell. Zn(s) |Zn2+(aq)||Cu2+(aq) |Cu(s
-
Figure 9.46 shows a rotating system in which the shaft is supported in bearings at \(A\) and \(B\). The three masses \(m_{1}, m_{2}\), and \(m_{3}\) are connected to the shaft as indicated in the...
-
In an effort to speed up the collection of receivables, Hill Publishing Company is considering increasing the size of its cash discount by changing its credit terms from 1/10, net 30 to 2/10, net 30....
-
Define and contrast current assets and current liabilities. List several examples of each, and discuss the examples. For example, if you list short-term debt, define and discuss what short-term debt...
-
Stainless Steel Specialties (SSS) is a manufacturer of hot water-based heating systems for homes and commercial businesses. The company has grown about 10% in each of the past five years. The company...
-
In 1994, the NCAA Gender Equity Task Force recommended the creation of a list of emerging sports for women to help athletics departments increase athletics opportunities. The list was soon...
-
What are some methods for encouraging external and internal motivation?
-
What is the difference between the game layer, a system that is game-like and an Alternate Purpose Game?
-
What are two poles of the gamified system spectrum?
-
What kind of noncash asset misappropriation scheme was perpetrated by Mr. Kozlowski?
-
Who was the Tyco Chief Executive Officer at the time of the investigation?
-
A stock will pay no dividends for the next 9 years. Ten years from now, the stock is expected to pay its first dividend in the amount of $2.9. It is expected to pay a dividend of $3.2 exactly eleven...
-
Four GWU students have been selected to taste food sold by 3 different food trucks labeled as food truck A, B and C on H & 22nd Streets every Monday for 3-weeks. For each student, food trucks are...
-
Components of the hydrologic cycle may be classified as follows: (a) Water-holding elements, (b) Liquid transport phases, and (c) Vapor transport phases. Using Figure 11.1, apply one of these three...
-
Flow nets yield more information than just seepage rates. For example, the total energy head at an~ location in the flow net can be estimated using equipotential lines. Recall that equal head drop...
-
Two wells penetrating a confined aquifer are 600 ft apart. Each well will be pumped at 40 ,000 ft3/day. However, the pumping from the second well will start a day and a half after the first one....
-
S1 Ltd and S2 Ltd belong to the same capital gains group. In May 2020, S1 Ltd transferred a chargeable asset to S2 Ltd. The original cost of this asset to S1 Ltd was 10,000 and its market value in...
-
The ordinary share capital of W Ltd (which is a trading company) is owned 30% by X Ltd, 25% by Y Ltd and 45% by Z Ltd. All of these companies are UK resident and they prepare accounts to 31 March....
-
E Ltd has taxable total profits of 800,000 for the year to 31 March 2024 and receives no dividends. For many years, the company has owned 65% of the ordinary shares of F Ltd and 30% of the ordinary...
Study smarter with the SolutionInn App