The A&M Hobby Shop carries a line of radio-controlled model racing cars. Demand for the cars...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The A&M Hobby Shop carries a line of radio-controlled model racing cars. Demand for the cars is assumed to be constant at a rate of 44 cars per month. The cars cost $50 each, and ordering costs are approximately $18 per order, regardless of the order size. The annual holding cost rate is 20%. a. Determine the economic order quantity and total annual cost under the assumption that no backorders are permitted. If required, round your answers to two decimal places. Total Cost $ b. Using a $49 per-unit per-year backorder cost, determine the minimum cost inventory policy and total annual cost for the model racing cars. If required, round your answers to two decimal places. S Total Cost $ c. What is the maximum number of days a customer would have to wait for a backorder under the policy in part (b)? Assume that the Hobby Shop open for business 300 days per year. If required, round your answer to two decimal places. Length of backorder period d. Would you recommend a no-backorder or a backorder inventory policy for this product? Explain. If required, round your answers to two decimal places. days e. If the lead time is six days, what is the reorder point for both the no-backorder and backorder inventory policies? If required, round your answers to two decimal places. Reorder point for no-backorder inventory policy is Reorder point for backorder inventory policy is The A&M Hobby Shop carries a line of radio-controlled model racing cars. Demand for the cars is assumed to be constant at a rate of 44 cars per month. The cars cost $50 each, and ordering costs are approximately $18 per order, regardless of the order size. The annual holding cost rate is 20%. a. Determine the economic order quantity and total annual cost under the assumption that no backorders are permitted. If required, round your answers to two decimal places. Total Cost $ b. Using a $49 per-unit per-year backorder cost, determine the minimum cost inventory policy and total annual cost for the model racing cars. If required, round your answers to two decimal places. S Total Cost $ c. What is the maximum number of days a customer would have to wait for a backorder under the policy in part (b)? Assume that the Hobby Shop open for business 300 days per year. If required, round your answer to two decimal places. Length of backorder period d. Would you recommend a no-backorder or a backorder inventory policy for this product? Explain. If required, round your answers to two decimal places. days e. If the lead time is six days, what is the reorder point for both the no-backorder and backorder inventory policies? If required, round your answers to two decimal places. Reorder point for no-backorder inventory policy is Reorder point for backorder inventory policy is
Expert Answer:
Answer rating: 100% (QA)
EOQ sqrt2DSHCTAC DSEOQ EOQHC2 Where D is the annual demand in units S is the ordering cost per order H is the holding cost rate C is the unit cost Plu... View the full answer
Related Book For
Quantitative Methods for Business
ISBN: 978-0324651751
11th Edition
Authors: David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey cam
Posted Date:
Students also viewed these general management questions
-
The A&M Hobby Shop carries a line of radio-controlled model racing cars. Demand for the cars is assumed to be constant at a rate of 40 cars per month. The cars cost $60 each, and ordering costs are...
-
The A & M Hobby Shop carries a line of radio- controlled model racing cars. Demand for these cars is assumed to be a constant rate of 40 cars per month. The cars cost $ 60 each, and ordering costs...
-
Estimate the cash value of a life insurance policy as of December 31, 2016 based on the following information: Cash value as of January 2016 $90,000 Total premium during the year $ 8,000 Term life...
-
Complete the following chart by placing an "X" under the applicable column headings. Classify each cost as a fixed cost or a variable cost and as either a direct or indirect product cost or a period...
-
After Jack purchases his phone and data plan, is it likely that he experienced cognitive dissonance with his purchase? What evidence makes you answer the way you did?
-
Grandview Global Financial Services is an international corporation providing multiple financial services. Although it is one of the smaller players in the field, the firm has about 20,000 employees...
-
The owner of an optometry practice, in a city with more than a hundred other such practices, has the following demand and cost schedules for eye exams: a. Fill in the columns for total revenue,...
-
Write a function report card where the user can enter each of his grades, after which the program prints out a report card with GPA. Remember to ask the user how many classes he took (think - why...
-
Pension data for Barry Financial Services Inc., include the following: Required: 1. Determine pension expense for 2021.2. Prepare the journal entries to record? (a) Pension expense (b) Gains and...
-
For the topic: How Coronavirus affects tourism? please, propose solutions to these 5 environmental problems , 1- Tourism is entering a major crisis due to the worldwide panic of the Corona Virus,...
-
Let Y,..., Yn be i.i.d random variables from N(u,0). f=" Y and S2 = 1-2 1( - 1). Define a. Define b. Define How is Z = Z distributed? Justify your answer. W = Z = n(P-) 0 Yi-H, i = 1,..., n How is W...
-
A detention pond has been built and the characteristics of the catchment and the pond are detailed in Tables A1-A3. Plot the hydrograph of the inflow and outflow of the pond. Time (day) Flow (m/s)...
-
2. The Jayhawk Pharmaceutical Company is producing influenza vaccines of three types using batch processing. They need to produce two batches of vaccine #1, and one batch each of vaccine #2 and...
-
Abnormal wastage per unit 50 Selling price per unit? 1.2 There were 1 500 units of finished products on hand at 31 December 2019. 1.3 The selling agents' commission is 10% of the selling price. 1.4...
-
manufacturer costs: Purchasing Handling materials Machine setups Inspections Utilities Cost Driver Orders Material moves Machine setups Number of inspections Square feet $70,000 31,333 70,500 25.500...
-
Lee is a hospital Nurse in Colombo and in 2000 she had yearly salary of $60,000. In 2010 she earned $92,000 as salary. The Price Index representing her buying power in 2000 was 100 and in 2010 it is...
-
What is the back work ratio? What are typical back work ratio values for gas-turbine engines?
-
Mid-West Publishing Company publishes college textbooks. The company operates an 800 telephone number whereby potential adopters can ask questions about forthcoming texts, request examination copies...
-
The League of American Theatres and Producers, Inc., collects a variety of statistics for Broadway plays, such as gross revenue, playing time, and number of new productions. The following data show...
-
Petes Market is a small local grocery store with only one checkout counter. Assume that shoppers arrive at the checkout lane according to a Poisson probability distribution, with an arrival rate of...
-
The accounting records of the Happy Tickers Sports and Social Club are in a mess. You manage to find the following information to help you prepare the accounts for the year to 31 December 2015. (1)...
-
The Milham Theatre Club has been in existence for a number of years. Members pay an annual subscription of 15 which entitles them to join trips to professional productions at a reduced rate. On 1...
-
Place a tick in the appropriate column for each of the following cost items: (a) Purchases of raw materials (b) Direct wages (c) General factory expenses (d) Depreciation of machinery (e) Commission...
Study smarter with the SolutionInn App