Essay
Acme Industries is currently experiencing problems with its inventory of anvils.Its manager, Willy Coy currently orders the anvils in batches of 10,000.Four orders are placed during the year to meet the estimated sales demand of 40,000 units.Each order costs $20 and each unit costs $2 to carry.Mr.Coy maintains a safety stock of 500 anvils.Required:
b.What is the Economic Order Quantity for Acme Industries?
c.What is the average inventory if Acme uses the EOQ calculated in part b)and it still maintains its 500 units of safety stock?
d.What is Acme's annual savings in inventory costs by using the EOQ and maintaining its safety stock?
Correct Answer:
Verified
b.EOQ = = = 894.43 round up...View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Correct Answer:
Verified
b.EOQ = = = 894.43 round up...View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q79: A financial benefit of a just-in-time system
Q95: Delta Industries is currently experiencing problems with
Q96: Ralph was in the process of completing
Q97: Companies implementing just-in-time production systems manage inventories
Q98: Answer the following question(s)using the information below.Walton
Q99: Use the information below to answer the
Q102: Garden Equipment Manufacturing Ltd.(GEM)has introduced a just-in-time
Q103: Answer the following question(s)using the information below:<br>The
Q104: An inventory item of XYZ Manufacturing has
Q105: Safety stock is the buffer inventory held