Week3_Bancroft

Week3_Bancroft - 1 D= P= C= EOQ= 10,000 $200 $7 2DP/C=...

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1 D=  10,000  P=  $200  C=  $7  EOQ= √2DP/C=  √(2*10000*200)/7=  755.93 756 jerseys 2 Number of orders per year= D = 10000 = 14 orders EOQ 756 3 Demand each working day= D= 10000= 24.70 jerse   Number of working days 365 Purchase lead time= 7 days Reorder point= 27.40 x 7 13.22 191.80   192 jerseys
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eys per day
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1 Annual Relevant Costs of Current Production System and JIT Production System for Champion Hardware Company Relevant Costs under Current Relevant Items Production System Annual tooling costs  -    Required return on investment: 15% per year*$1,000,000 of avg inventory per year $150,000 15% per year*$200,000 of avg inventory per year Insurance, space, materials handling and set-up costs  300,000  Rework costs  200,000  Incremental revenues from higher selling prices Total net incremental costs $650,000 Annual difference in favor of JIT production $315 2 Other nonfinancial and qualitative factors that Champion should consider in deciding whether it should implement a JIT system include: a. Whether a detailed system for integrating the sequential operations of the mfg proces
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This note was uploaded on 06/01/2011 for the course ACCT 433b taught by Professor Alfredcontreras during the Spring '11 term at National.

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Week3_Bancroft - 1 D= P= C= EOQ= 10,000 $200 $7 2DP/C=...

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