Accounting: Questions And Answers: Co And Chapters

Words: 1924
Pages: 8

A233 parts
Weekly demand=32,LT=1 week,Price=$18/unit,Ordering cost=$16/unit
Demand per year=32x52=1664
*D=demand,Q=quantity,Oc=Ordering cost,P=Price.
EOQ=>Ordering cost= Carrying cost=>(D/Q) x Oc=(Q/2) x P x 23%=>1664/Qx16=(Q/2) x 18 x 23%=>114

A) When Q=EOQ=114,
Ordering cost=1664/114x16=$233.54
Carrying cost=(114/2) x18 x23%=$235.98
Therefore total cost= Ordering cost + Carrying cost=234+236=$469.52

B) When Q= 64,
Ordering cost = 1664/64x16=$416
Carrying cost = (64/2) x 18 x 23%=$132.48
Therefore Total cost= Ordering Cost+ Carrying cost = 416+132.48=$548.48

C) When taking price break,Q= 200,P*= 18-2= $16
Ordering cost= 1664/200 x 16= $133.12
Carrying Cost= (200/2) x 16 x23%=$368
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They are always on time in delivering their objective but sadly it’s a contributor to the company spiral downfall too. * They will get a new design out according to forecasted budget and marketing plans made for the financial year. They are prompt. * But they are shellfish by not bringing up the issue on making the previous model obsolete in the catalogue. This contributes to the mayhem happening in the inventory. To clear an out-dated product needs all the departments to work as a team * When they release a new design, previous designs become history. Imagine the turnover the inventory is facing. * The company has to declare the available finished products of the previous design as scrap.

According to Ellen the Chief Engineer, he understands that Carls computer strives for their new designs and features and by meeting this benchmark of theirs, his job is safe and sound as that is his main KPI. He has tried to convince the inventory department then there will be a new design upcoming in next few weeks so therefore push out the existing stock of the current design. I will say this is not what his should do. He should- * Call the Sales head and inform him that a new design is coming so therefore introduce an offer or sale to help the inventory roll out current stock * He should sit down with the inventor Head and inform him on how long he needs to clear the current stock before he releases his new product. * He should talk to the