JJ Corporation resells one product to a small isolated community. It sells an average of 60 sacks, but may sell as low as 20 sacks and as high as 75 sack ecah day. The supply charges 500 per sack and an additional fixed cost of 1,300 for deliveries. It takes an average of ten days for orders to arrive. Investment in inventory are funded thru debt and equity ata weighted average cost of capital of 14%. How much would the minimum total annual inventory-related costs that JJ would incur if it applies the reorder point and eoq models? Use 365 days.

JJ Corporation resells one product to a small isolated community. It sells an average of 60 sacks, but may sell as low as 20 sacks and as high as 75 sack ecah day. The supply charges 500 per sack and an additional fixed cost of 1,300 for deliveries. It takes an average of ten days for orders to arrive. Investment in inventory are funded thru debt and equity ata weighted average cost of capital of 14%. How much would the minimum total annual inventory-related costs that JJ would incur if it applies the reorder point and eoq models? Use 365 days.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 11P: Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35...

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JJ Corporation resells one product to a small isolated community. It sells an average of 60 sacks, but may sell as low as 20 sacks and as high as 75 sacks each day. The supplier charges P500 per sack and an additional fixed cost of P1,300 for deliveries. It takes an average of ten days for orders to arrive. Investment in inventory are funded thru debt and equity at a weighted average cost of capital of 14%. How much would the minimum total annual inventory-related costs that JJ would incur if it applies the reorder point and EOQ models? Use 365 days.
KK Corporation resells one product to a small isolated community. It sells an average of 60 sacks, but may sell as low as 20 sacks and as high as 75 sacks each day. The supplier charges P500 per sack and an additional fixed cost of P1,300 for deliveries. It takes an average of ten days for orders to arrive. Investment in inventory are funded thru debt and equity at a weighted average cost of capital of 14%. How much would the minimum total annual inventory-related costs that KK would incur if it applies the reorder point and EOQ models? Use 365 days.
Compost Wholesalers presently uses a public warehouse agreement to finance most of its inventory. The average amount of inventory is $4,000,000, the bank will loan at 5.5 % per annum for the 6-week loan. The loan amount will be against 70 percent of the value of the inventory, and the public warehouse fee is $2,500 per week. Total transportation cost for the loan period is 1.5 percent of the average value of the inventory [that is, (0.015)($4,000,000)]. Find period rate Find m Find the annual percentage rate (APR) Find the effective annual cost (EAR)
Big Toy, Inc. annually sells 115,000 units of Big Blobs. Currently, inventory is financed through the use of commercial bank loans. Big Toy pays $11.80 per Big Blob. The cost of carrying this inventory is $3.40 per unit while the cost of placing an order involves expenses of $500 per order. Since Big Blobs are imported, delivery is generally 25 days but may be as long as 30 days. To manage inventory more efficiently, the management of Big Toy, Inc. has decided to use the EOQ model plus a safety stock to determine inventory levels. What is the economic order quantity? Round your answer to the nearest whole number. units Today is January 1 and the current level of inventory is 11,500 units; when should the first order be placed based on the economic order quantity? Assume 365 days in a year. Round your answer to the nearest whole number. The first order based on the EOQ model would be placed on the th day. Management always wants sufficient Big Blobs so that they never are out…
Assume Wyteboard Corp. markers uses 1,440,000 gallons of ink each year. Assume Palmer will order the ink at a rate of P2 per gallon plus a fixed cost of P100 per order. At cost, the firm's carrying cost is 20% of the inventory value. What is Wyteboard's minimum costs of ordering and holding inventory? SHOW THE ANSWER IN A GOOD ACCOUNTING FORM
Assume Wyteboard Corp. markers uses 1,440,000 gallons of ink each year. Assume Palmer will order the ink at a rate of P2 per gallon plus a fixed cost of P100 per order. At cost, the firm's carrying cost is 20% of the inventory value. What is Wyteboard's minimum costs of ordering and holding inventory?
Assume Wyteboard Corp. markers uses 1,440,000 gallons of ink each year. Assume Palmer will order the ink at a rate of P2 per gallon plus a fixed cost of P100 per order. At cost, the firm's carrying cost is 20% of the inventory value. What is Wyteboard's minimum costs of ordering and holding inventory?Please provide a solution
The monthly demand of GHI's sole product is 30,000 cases. Based on data analysis, the carrying cost per case is P30 per year. For each order, ABC spends an average of P200 in worker's wages, P700 in freight and P560 in other expenses. If ABC would like follow the EOQ model but also maintain a safety stock of 10,000 cases, how much would the total annual inventory-related costs be?
The monthly demand of DEF’s sole product is 30,000 cases. Based on data analysis, the carrying cost per case is P30 per year. For each order, ABC spends an average of P200 in worker’s wages, P700 in freight and P550 in other expenses. If ABC would like follow the EOQ model but also maintain a safety stock of 10,000 cases, how much would the total annual inventory-related costs be?
Assume Palmer Corp. markers uses 1,440,000 gallons of ink each year. Assume Palmer will order the ink at a rate of P2 per gallon plus a fixed cost of P100 per order. At cost, the firm's carrying cost is 20% of the inventory value. What is Palmer's minimum costs of ordering and holding inventory?
Butler Corp. (BC) sells its stainless-steel products on terms of “2/10, net 40”. BC is considering granting credit to retailers with total assets as low as $400,000. Currently the lowest asset limit is $850,000. BC believes sales will increase $10 million from the new credit group but the average collection period for this new group will be 80 days versus the current average collection period of 30 days. If management estimates that 40% of the new customers will take the cash discount and 10% of the new business will be written off as bad-debt loss, should BC lower its credit standards? Assume BC’s variable cost ratio is 0.80 and its required pretax rate of return on current assets investment is 14%. BC also estimates that an additional investment in inventory of $750,000 is necessary for the anticipated sales increase
A manufacturer currently prices its product at 10 TL per unit. Last year, the manufacturer sold 60.000 units. The variable cost per unit is 6 TL. Total fixed costs are 120.000 TL. The manufacturer intends to increase sales by 5%. Current accounts receivable collection period is 30 days. If the manufacturer wants to relax its credit standards, the expectation is that bad debt expenses will increase from 1% of sales to 2% of sales. The opportunity cost of investing in accounts receivables is 15%. In order to benefit from relaxing its credit standards, what would be the expected maximum accounts receivable collection period? (Assume that existing customers are not expected to alter their payment habits. 1 year = 365 days) a) 82,38 days b) 63,33 days c) 105,82 days d) 63,73 dayse) other