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21 miniature company sells stuffed tigers birtal inc manufactures many different stu 4301175

 

21) Miniature Company sells stuffed tigers. Birtal Inc. manufactures many different stuffed animals. Miniature orders 20,800 tigers per year, 400 per week, at $15 per tiger. The manufacturer covers all shipping costs. Miniature earns 15% on its cash investments. The purchase-order lead time is 3 weeks. Miniature sells 310 tigers per week. The following data are available (based on management's estimates):

 

Estimated ordering costs per purchase order$22

Estimated insurance, materials handling, breakage,

and so on, per year$7

Actual ordering costs per order$25

 

What is the economic order quantity using the estimated amounts?

A) 637.7 stuffed tigers

B) 314.5 stuffed tigers

C) 191 stuffed tigers

D) 325 stuffed tigers

22) Relevant total costs in the economic order quantity decision model equal relevant ordering costs plus relevant ________.

A) carrying costs

B) stockout costs

C) quality costs

D) purchasing costs

 

Answer the following questions using the information below:

 

The Allianz Company produces a specialty wood furniture product, and has the following information available concerning its inventory items:

 

Relevant ordering costs per purchase order$450

Relevant carrying costs per year for each package:

Required annual return on investment15%

Required other costs per year$4

 

Annual demand is 30,000 packages per year. The purchase price per package is $48.

 

23) What is the economic order quantity?

A) 1,936.50 units

B) 1,414.21 units

C) 1,552.65 units

D) 2,598.07 units

 

24) What is the annual relevant ordering costs?

A) $5,196

B) $8,695

C) $6,971

D) $9,547

25) What is the annual relevant carrying costs?

A) $5,196

B) $6,971

C) $8,695

D) $3105.30

 

26) What are the relevant total costs at the economic order quantity?

A) $17,390

B) $10,392

C) $13,942

D) $11,800

 

27) Which of the following statements is true of Allianz's EOQ system costs?

A) At EOQ, the annual relevant ordering costs is exactly the half of annual relevant carrying costs.

B) At EOQ, the annual relevant carrying costs is higher than the annual relevant ordering costs.

C) At EOQ, the annual relevant carrying costs is exactly the half of the annual relevant total costs.

D) At EOQ, the annual relevant carrying costs is equal to the annual relevant total costs.

28) What are the total relevant costs, assuming the quantity ordered equals 1,000 units?

A) $17,100

B) $16,500

C) $15,500

D) $19,100

 

29) How many deliveries will be required at the economic order quantity?

A) 15.50 deliveries

B) 15 deliveries

C) 19.32 deliveries

D) 21.21 deliveries

 

30) The annual relevant total costs are at a minimum when relevant ________.

A) ordering costs are greater than the relevant carrying costs

B) carrying costs are greater than the relevant ordering costs

C) carrying costs are equal to relevant ordering costs

D) carrying costs are equal to relevant purchasing costs

 

 

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