Question: Problem #1 Demand for an item is constant at 100 units a year. The unit cost is $50, reorder cost is $40, and holding cost

Problem #1 Demand for an item is constant at 100 units a year. The unit cost is $50, reorder cost is $40, and holding cost is $20 a year. Any demand which occurs when no stock remains is lost. The direct cost by lost sales is just ignored. (a) What is the minimum selling price which makes it profitable to stock (order) the item? (b) Suppose that the selling price is $55. What is the optimal order quantity

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!

Demand for an item is constant at 100 units a year. Unit cost is 50, reorder cost is 40 and holding cost is 40 per cent of value a year. Any demand that occurs when no stock remains is lost. What is...

Demand for an item is constant at 100 units a year. Unit cost is 50, reorder cost is 40 and holding cost is 40% of value a year. A ny demand that occurs when no stock remains is lost. What is the ...

Kindly, provide the solutions for 1,3, and 4 Problems 3.1 Demand for an item is constant at 1,000 units a year. Unit cost is 50, reorder cost is 100, holding cost is 25 per cent of value a year and...

Demand for an item is constant at 50 units a year. Unit cost is $25, reorder cost is $20 and holding cost is 40 per cent of value a year. Any demand that occurs when no stock remains is lost. What is...

Demand for an item is constant at 1,000 units a year. Unit cost is 50, reorder cost is 100, holding cost is 25 per cent of value a year and no shortages are allowed. Describe an optimal inventory...

Question 1 Demand for an item is constant at 450 units a month. The reorder cost and delivery charge amount to $1100 and the cost of holding stock is 15% of the value a year. A supplier quotes the...

The demand for an item is constant at 100 units a year. Unit cost is 50, the cost of processing an order is 20 and holding cost is 10 a unit a year. What are the economic order quantity, cycle length...

The demand for an item is constant at 200 units a year. Unit cost is 50, cost of processing an order is 20 and holding cost is 10 per unit per annum. What are the economic order quantity,...

Demand for an item is constant at 20 units a week, the reorder cost is sh.125.00 an order and holding cost is sh2.00 a unit a week. if suppliers guarantee delivery within 2 weeks . what is the best...

Demand for an item is constant at 120 units a month. Unit cost is 60, reorder cost is 60, holding cost is 25 per cent of value a year, shortage cost for backorders is 40 per cent of value a year....

Booher Book Stores has a beta of 0.8. The yield on a 3-month T-bill is 4% and the yield on a 10-year T-bond is 6%. The market risk premium is 5.5%, and the return on an average stock in the market...

Fred puts $5,475 into a term deposit on May 15th. The deposit earns a simple interest rate of 4%. If the term deposit will mature on August 14th, how much interest will Fred earn?

Nakamura Company provided the following income statement for the last year: Sales $728,000,000 Less: Variable expenses 490,175,000 Contribution margin $237,825,000 Less: Fixed expenses 128,625,000...

Case Greenbuilders Pte Lid ("GPL") is a local construction company which specialises in providing bespoke Design and Build construction services for private residential homes that are designed to be...