44) Picture Company has one particular product that has an annual demand of 5,000 units. Total manufacturing costs per unit total $50. Ordering costs for the product total $60 per purchase order. Currently, the carrying costs per unit are 25% of manufacturing costs. Required: Determine the economic manufacturing order quantity.
Diff: 2Objective: 2AACSB: Application of knowledge45) Ralph was in the process of completing the quarterly planning for the purchasing department when a major computer malfunction lost most of his data. For direct material XXX he was able to recover the following: Average inventory level of XXX200Orders per year40Average daily demand48Working days per year250Annual ordering costs$4,000Annual carrying costs$6,000Ralph purchases at the EOQ quantity level. Required: Determine the annual demand, the cost of placing an order, the annual carrying cost of oneunit, and the economic order quantity.
Diff: 3Objective: 2AACSB: Application of knowledge