omework: Chapter 15 Graded Homework Save ore: 0.33 of 1 pt 7 of 9 (2 complete) H
ID: 2658049 • Letter: O
Question
omework: Chapter 15 Graded Homework Save ore: 0.33 of 1 pt 7 of 9 (2 complete) HY Score: 3.7%, 0.33 of 9 pts Problem 15.L02.24 (similar to) E Question Help manufacturing plant requires ten-penny nails to produce its product. If it runs out of nails, the whole plant shuts down. The company uses 15,500 nails er year. Order costs are $22 per order, and carrying costs are $0.04. Assume the firm wants a safety stock of 4,000 nails . What is the economic order quantity? b. What is the safety stock quantity? c. What will be the amount of the first order? a. What is the economic order quantity? The economic order quantity is 4129.16 nails. (Round up the nearest whole number) b. What is the safety stock quantity? The safety stock quantity is nals (Round up to the nearest whole number)Explanation / Answer
Economic order quantity = Square root over ( 2 times annual demand * order cost / carrying cost)
= square root over * ( 2 * 15500 * 22 / 0.04 ) = 4129.16
Safety stock = 4000 nails
First order = Safety stock + EOQ = 4000 + 4129.16 = 8129.16
Question - 2
Available balance = 10500 - 6000 = 4500
Book balance = 10500 ............ since, 6000 was not yeat cleared
Net float = Book balance - available balance = 10500 - 4500 = 6000
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