TranscribedText: 192 193 Q4 Green Lid. has undertaken some inventory planning for one of its main raw
Question:
TranscribedText: 192 193 Q4 Green Lid. has undertaken some inventory planning for one of its main raw materials. Inventory planning data is listed below Q4 sub 194 195 Working days per year 320 days 196 Normal use per day 225 units 197 Maximum use per day 260 units 198 Minimum use per day 150 units 199 Lead time days 200 Cost of placing one order $20.00 201 Carrying cost per unit per year $2.00 202 203 Required: 204 1. Compute the following: 205 a. EOQ. (Do not round intermediate calculations. Round your final answer to the nearest whole number.) (2 marks) 206 EOQ - units 207 Supporting calculations b. Reorder Point (1 mark) Reorder point = units Supporting calculations c. The company has concerns about demand spikes and so would like to establish a safety stock. Based on the information provided, calculate the safety stock level and the new re-roder point including safety stock. (2 marks) Safety stock = units Revised Re-order point units Supporting calculations d. Referring to the original data, how would the following 3 independent situations affect the EOQ? Also briefly explain why (2 marks) Outcome Explanation Situation 1: a 10% increase in ordering costs only
Auditing An International Approach
ISBN: 978-0071051415
6th edition
Authors: Wally J. Smieliauskas, Kathryn Bewley