Explore BrainMass

Explore BrainMass

    Problems on ABC analysis for inventory control, EOQ

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Please see the attached file for full problem description.

    TABLE 11.3 DOLLARS OF ADDITIONAL SALES NEEDED TO EQUAL $1 SAVED THROUGH THE SUPPLY CHAIN
    PERCENT OF SALES SPENT IN THE SUPPLY CHAIN
    PRESENT NET PROFIT OF FIRM 30% 40% 50% 60% 70% 80% 90%
    2 $2.78 $3.23 $3.85 $4.76 $6.25 $9.09 $16.67
    4 $2.70 $3.13 $3.70 $4.55 $5.88 $8.33 $14.29
    6 $2.63 $3.03 $3.57 $4.35 $5.56 $7.69 $12.50
    8 $2.56 $2.94 $3.45 $4.17 $5.26 $7.14 $11.11
    10 $2.50 $2.86 $3.33 $4.00 $5.00 $6.67 $10.00

    Using Table 11.3, determine the sales necessary to equal a dollar of savings oon purchases for a company that has:

    a. A net profit of 6% and spends 60% of its revenue on purchases
    b. A net profit of 8% and spends 80% of its revenue on purchases.

    12.1
    George Walker has complied the following table of six items in inventory along with the unit cost and the annual
    demand in units

    identification code unit cost ($) annual demand in units
    XX1 $5.84 1,200
    B66 $5.40 1,110
    3CPO $1.12 896
    33CP $74.54 1,104
    R2D2 $2.00 1,100
    RMS $2.08 961
    Using ABC analysis, which item(s) should be carefully controlled using a quantitative inventory technique
    and which item(s) should not be closely controlled?

    12.5
    William Beville's computer training school, in Richmond, stsocks workbooks with the following characteristics:

    Demand D = 19,500 units/year
    Ordering cost S = $25/order
    Holding cost H = $4/unit/year

    a. Calculate the EOQ for the workbooks
    b. What are the annual holding costs for the workbooks
    c. What are the annual ordering costs

    12.13
    Joe Henry's machine shop uses 2,500 brackets during the course of a year. These brackets are purchased from a supplier 90 miles away.
    the following information is known about the brackets.

    annual demand 2,500
    holding cost per bracket per year $1.50
    order cost per order $18.75
    Lead time 2 days
    working days per year 250

    a. Given the above information, what would be the economic order quanity (EOQ)?
    b. Gicen the EOQ, what would be the average inventory? What would be the annual inventory hold cost?
    c. Given the EOQ, how many orders would be made each year? What would be the annual order cost?
    d. Given the EOQ, what is the total annual inventory cost?
    e. What is the time between orders?
    f. What is the reorder point (ROP)?

    12.19
    Cesar Rogo Computers,a Mississippi chain of computer hardware and software retail outlets, supplies both
    educational and commercial customers with memory and storage devices. It currently faces the
    following order decision related to purchase of DC-ROMs:

    D = 36,000 Disks
    S = $25
    H = $0.45
    Purchase price = $0.85
    Discount price = $0.82
    Quantity needed to qualify for the discount = 6,000 disks

    Should the discount be taken?

    © BrainMass Inc. brainmass.com November 30, 2021, 12:10 am ad1c9bdddf
    https://brainmass.com/economics/supply-and-demand/problems-on-abc-analysis-for-inventory-control-eoq-24653

    Attachments

    Solution Preview

    Please see the attached file for complete answers.
    TABLE 11.3 DOLLARS OF ADDITIONAL SALES NEEDED TO EQUAL $1 SAVED THROUGH THE SUPPLY CHAIN
    PERCENT OF SALES SPENT IN THE SUPPLY CHAIN
    PRESENT NET PROFIT OF FIRM 30% 40% 50% 60% 70% 80% 90%
    2 $2.78 $3.23 $3.85 $4.76 $6.25 $9.09 $16.67
    4 $2.70 $3.13 $3.70 $4.55 $5.88 $8.33 $14.29
    6 $2.63 $3.03 $3.57 $4.35 $5.56 $7.69 $12.50
    8 $2.56 $2.94 $3.45 $4.17 $5.26 $7.14 $11.11
    10 $2.50 $2.86 $3.33 $4.00 $5.00 $6.67 $10.00

    Using Table 11.3, determine the sales necessary to equal a dollar of savings oon purchases for a company that has:

    a. A net profit of 6% and spends 60% of its revenue on purchases $4.35 (See table above)
    b. A net profit of 8% and spends 80% of its revenue on purchases. $7.14 (See table above)

    12.1
    George Walker has complied the following table of six items in inventory along with the unit cost and the annual
    demand in units

    identification code unit cost ($) annual demand in units
    XX1 $5.84 1,200
    B66 $5.40 1,110
    3CPO $1.12 896
    33CP $74.54 1,104
    R2D2 $2.00 1,100
    RMS $2.08 961
    Using ABC analysis, which item(s) should be carefully controlled using a quantitative inventory technique
    and which item(s) should not be closely controlled?

    identification code unit cost ($) annual demand in units annual demand in $ % of Total $ Volume Rank
    XX1 $5.84 1,200 $7,008.00 6.97% 2
    B66 $5.40 1,110 $5,994.00 5.96% 3
    3CPO $1.12 896 $1,003.52 1.00% 6
    33CP $74.54 1,104 ...

    Solution Summary

    Four problems on Supply Chain, ABC analysis for inventory control, EOQ (Economic Order Quantity).

    $2.49

    ADVERTISEMENT