Question: The average demand for a particular part is 29 units a day. It costs $60 to place an order, and the inventory carrying cost is

The average demand for a particular part is 29 units a day. It costs $60 to place an order, and the inventory carrying cost is $10 per unit per year. Assume 250 working days a year. The part requires a 95% of service level with a safety stock requirement of 22 units. What is the average inventory of the part at any given time?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

To calculate the average inventory of the part at any given time we need to consider the demand lead ... View full answer

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 Accounting Questions!

consider the following industry in which two firms produce electricity: a coal firm and a natural gas firm. Both firms sell electricity at the same constant price: P = PMB = $50/MWh The social cost...

a. SMC recently re-named itself from Silo Manufacturing Corporation to give the impression they were a modern manufacturer. Located in Blacksburg, Virginia, SMC is a regional provider of grain...

A medical equipment has an average monthly demand is 113 units. Its unit cost is $358. It costs $379 to place an order, and the inventory carrying cost is $38 per unit per year. The equipment...

The demand for a particular part called SKU 005 is 1,500 units a year. The cost of one SKU 005 is $$50.00$. It costs $$60.00$ to place an order for SKU 005, and the user of SKU 005 has a per year...

Tele-Reco is a new specialty store that sells television sets, videotape recorders, video games, and other television-related products. A new Japanese-manufactured videotape recorder costs Tele-Reco...

The Ali Baba Co is the only supplier of a particular type of Oriental carpet. The estimated demand for its carpets is Q = 112,000 500P + 5M, Where Q = number of carpets, P = price of carpets (dollar...

The weekly demand for a certain part is 950 units. The plant operates 5 days per week, with an effective operating time of 440 min per day. Determine the takt time for this part.

LCC Medical Manufacturing, located in Punta Gorda, Florida, produces medical devices for orthopedic surgery including replacement parts for human knees, hips, and elbows, and surgical tools. One...

Computer Supplies Inc. must order diskettes from its supplier in lots of one dozen boxes. Given the information provided here, complete the following table and determine the economic ordering...

Suppose that the annual demand for a component is approximately 60,000 units. The company orders the component from a supplier who has offered the following quantity discount schedule. Order Quantity...

A hot air balloon is released at ground level, and it rises into the air at a constant rate. After 5 seconds the height of the balloon is 20 feet. The balloon continues to rise at the same rate....

Explain desirable features of a good message passing system.

Divide using long division. StartFraction 2 x squared plus 1 5 x plus 2 Over 2 x plus 1 EndFraction

The Saskatchewan power plant that services all manufacturing divisions of Sask Engineering has a budget for the coming year. This budget has been expressed in the following monthly terms: Needed at...

Sweeny Corporation owns 60 percent of Bitner Companys shares. Partial 20X2 financial data for the companies and consolidated entity were as follows: On January 1, 20X2, Sweenys inventory contained...

Charles Giles worked 46 hours during this pay week. He is paid time and a half for hours over 40 and his pay rate is $17.90/hour. What was his overtime premium pay for this workweek? Use the...

Carroll Company sells all its output at 25 percent above cost. Pacific Corporation purchases all its inventory from Carroll. Selected information on the operations of the companies over the past...

To qualify for the moving expense deduction, a taxpayer must satisfy a time test. a. What is the time test? b. When might the taxpayer be excused from satisfying the time test? c. What reporting...

The constraint (1+x2+x3+x4+x52) means thatselected.out of the-?????????- projects must bePlease choose the following option that would best fit the empty spaces above:O exactly 5,2Oat most 2,5Oat...

Assume that on December 31, 2017, The Coca-Cola Company borrows money from a consortium of banks by issuing a $900 million promissory note. The note matures in four years on December 31, 2021, and...

Exhibit 8.21 presents selected financial statement data for three chemical companies: Monsanto Company, Olin Corporation, and NewMarket Corporation. (NewMarket was formed from a merger of Ethyl...

Define financial leverage. Explain how financial leverage works to the benefit of the common shareholders.

Patty's Pancakes orders pancake mix once a week. The mix is used up by the end of the week, at which point more is reordered. Each time Patty orders pancake mix, she spends about a half hour of her...

Go back to problem 12 and build a financial planning model based on percentage of sales for Eagle Sports Supply using a spreadsheet similar to Figure 19.2. a. Assume 2013 sales grow at the...

A firm offers terms of 2/15, net 30. Currently, two-thirds of all customers take advantage of the trade discount; the remainder pay bills at the due date. a. What will be the firm's typical value for...