Solved: Effect of EOG ordering on supplier costs

continuation of Proble
Effect of EOG ordering on supplier costs continuation of Proble

Effect of EOG ordering on supplier costs (continuation of Problem 20-29). IMBest Computers
supplies computers to Computers 4 U. Terry Moore, the president of IMBest, is pleased to hear
that Computers 4 U will be ordering 500,000 computers. Moore has asked his accounting and
production departments to team up and determine the best production schedule to meet
Computers 4 U’s desired delivery schedule. Assume that the computers would be ordered in
batches of 2,000 and that there would be 250 orders annually. Because Computers 4 U’s
employees work a 5-day work week for 50 weeks a year, they would expect to receive an order
every day. They have developed the following two production alternatives:
A. IMBest could produce the 10,000 units demanded per week (2,000 >B. IMBest could
rearrange its production schedule during the week and produce 2,000 computers each day of
the week, totaling 10,000 computers per week. Shipments would be made at the end of each
production day. If it chooses this alternative, then it will incur setup costs every day, but carrying
costs would be negligible and are assumed to be zero.
1. If setup costs are $1,000 per setup and carrying costs are $50 per computer per year, what
would be the annual cost of each alternative?
2. How much would carrying costs have to increase before the preferred alternative would
change?

Effect of EOG ordering on supplier costs continuation of Proble

ANSWER
https://solvedquest.com/effect-of-eog-ordering-on-supplier-costs-continuation-of-proble/

Reach out to freelance2040@yahoo.com for enquiry.

Powered by TCPDF (www.tcpdf.org)