Exam 21: Management of Short-Term Assets: Inventory

Consider the following data supplied by Cotton Tops,a t-shirt distributor: Calculate the reorder point if a two-week lead time is required for production and shipping.

The level of carrying costs incurred per year is equal to:

Consider the following data supplied by Cotton Tops,a t-shirt distributor: Given that the manager charges equipment set-up costs as a separate cost to the purchase price of $4.92 per t-shirt,calculate total inventory costs.

The economic order quantity refers to the:

ABC Ltd sells 12 000 rolls of films per year.The wholesale price is $3 per roll.The cost of processing each order to be placed with the wholesaler is $12.50 and carrying costs are 30 cents per roll per year.What is the optimal time period between orders?

The safety stock size approach based on the customer service level takes account of conditions:

A major reason that companies hold short-term assets is because markets are not frictionless.

DEF Ltd produces a specialised type of metal sheeting.Demand is 5 000 sheets per year.Each production run costs $1 750 to set up and storage costs are $25 per sheet per year.What is the optimal size of a production run?

Consider the following data supplied by Cotton Tops,a t-shirt distributor: Given that the manager charges equipment set-up costs as a separate cost to the purchase price of $4.92 per t-shirt,calculate how many orders will be placed per year.

___________ includes raw materials,work in progress and finished goods not yet sold.

Consider the following data supplied by Cotton Tops,a t-shirt distributor: The manager charges equipment set-up costs as a separate cost to the purchase price of $4.92 per t-shirt.Calculate the savings/loss if Cotton Tops orders 5000 units at a time compared to 10 000 units at a time (assuming the discount only applies to orders of 10 000 units).

Storage cost refers to: