Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. general management
  3. ergonomics inc. sells ergonomically designed offic

Ergonomics Inc. sells ergonomically designed office chairs. The company has the following information: Average demand =...

90.2K

Verified Solution

Question

General Management

Ergonomics Inc. sells ergonomically designed office chairs. Thecompany has the following information: Average demand = 30 unitsper day Average lead time = 37 days Item unit cost = $57 for ordersof less than 270 units Item unit cost = $56 for orders of 270 unitsor more Ordering cost = $32 Inventory carrying cost = 20% Thebusiness year is 250 days Assume there is no uncertainty at allabout the demand or the lead time.

a. Calculate EOQ if unit cost is $57 and $56. (Note: These EOQsdo not need to be feasible in their price range.)

b. Calculate annual ordering costs for eachalternative?

c. Calculate annual inventory carrying costsfor each alternative?

d. Calculate annual product costs for eachalternative?

e. What will be the total costs for each alternative?(Round your answers to 2 decimal places.)

f. Based on your analysis, how many chairsshould they order at a time?

g. How much the firm can save annually by usingthe order quantity in Part f. instead of the first EOQ shown inPart a?

Answer & Explanation Solved by verified expert
3.7 Ratings (426 Votes)
Average demand per day 30 unitsThe business year 250 daysAnnual Demand D 250 30 7500 unitsAverage lead time 37 daysUnit cost 57 for orders of less than 270 unitsunit cost 56 for orders of 270 units or moreOrdering cost S 32Inventory carrying cost 20For orders of less than    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

1) discuss the origin of sperm and testosterone. 2) discuss the origin of the ovum and...

Medical Sciences
Q

discuss the respiratory system lung volume and capacities

Medical Sciences
Q

1. Macaroni Unlimited, Ltd. (MUL), is trying to decide whether or not to enter the spaghetti...

Economics
Q

Which of the following is true in sand crickets?Short-wing females invest more resources into egg...

Biology
Q

What are warning signs used for on roadways To warn of hazardous conditions ahead To...

Biology
Q

Which of the following questions can be asked about organisms that live in fresh water...

Biology
Q

A simple pendulum 50 cm long is suspended from the roof of a cart accelerating...

Physics
Q

Select the polar trigonometric form of each of the following complex numbers Estimate all one...

Calculus
Q

For a product, manufacturing costs have been estimated at $ 300,000 in fixed costs per...

Accounting
Q

Pauls Pool Service provides pool cleaning, chemical application, and pool repairs for residential customers. Clients...

Accounting
Q

G Question 19 1 points SAVE ANSWER John has set up a business that sells...

Accounting
Q

Question 5 1 points The interface between a database and the various application programs is...

Accounting