Imagine It manufactures 3D printers and purchases one of the components used in the printers from a supplier in the U.S. Imagine It uses 4,000 of these components per year at a cost of $160 each. The components are used evenly in the production process t

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Imagine It manufactures 3D printers and purchases one of the components used in the printers from a supplier in the U.S. Imagine It uses 4,000 of these components per year at a cost of $160 each. The components are used evenly in the production process t

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Cost-And-Managerial-Accounting-1A

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Answer 1

Answer #1

1. EOQ=√(2*Annual usage*ordering cost per order)/carrying cost

√(2*4000*20)/100=40 UNITS

2. Safety stock=(Expected rate of consumption*expected increase in the delivery time)+( Expected rate of consumption*normal reorder period)

=Assuming 15% risk of stock out asper question

4000*15%=600units

Safety stock=600*(2+6)/2=2400 units.

Reorder point=normal usage in units*normal lead time+safety stock

=Normal usage=annual usage/360

4000/360=11.11or11units

Normal lead time=(2+6)/2= 4

Safety stock= 11*4+2400= 2444 units.

3. Assuming stock out risk is 5 percent as per the question

Safety stock=(4000*5%)*(2+6)/2=800 units

Reorder level= 11*4+800=844 units

4. Carrying cost and ordering cost remain the same as no change in EOQ.

5. √(2*4000*11.25)/100= 300 units when following JIT

answered by: lindsey

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Answer 2

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Imagine It manufactures 3D printers and purchases one of the components used in the printers from a supplier in the U.S. Imagine It uses 4,000 of these components per year at a cost of $160 each. The components are used evenly in the production process t

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Imagine It manufactures 3D printers and purchases one of the components used in the printers from a supplier in the U.S. Imagine It uses 4,000 of these components per year at a cost of $160 each. The components are used evenly in the production process t

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Mohave Corp. is considering outsourcing production of the umbrella tote bag included with some of its products. The company has received a bid from a supplier in Vietnam to produce 8,000 units per year for $7.50 each. Mohave has the following information

Mohave Corp. is considering outsourcing production of the umbrella tote bag included with some of its products. The company has received a bid from a supplier in Vietnam to produce 8,300 units per year for $10.00 each. Mohave has the following information

Imagine It manufactures 3D printers and purchases one of the components used in the printers from a supplier in the U.S. Imagine It uses 4,000 of these components per year at a cost of $160 each. The components are used evenly in the production process t

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Add Answer to: Imagine It manufactures 3D printers and purchases one of the components used in the printers from a supplier in the U.S. Imagine It uses 4,000 of these components per year at a cost of $160 each. The components are used evenly in the production process t

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Mohave Corp. is considering outsourcing production of the umbrella tote bag included with some of its products. The company has received a bid from a supplier in Vietnam to produce 8,000 units per year for $7.50 each. Mohave has the following information

Mohave Corp. is considering outsourcing production of the umbrella tote bag included with some of its products. The company has received a bid from a supplier in Vietnam to produce 8,300 units per year for $10.00 each. Mohave has the following information

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Imagine It manufactures 3D printers and purchases one of the components used in the printers from a supplier in the U.S. Imagine It uses 4,000 of these components per year at a cost of $160 each. The components are used evenly in the production process t