what assumptions are inherent in the eoq model as presented in the chapter?
Answers
The Economic Order Quantity (EOQ) model, as presented in the chapter, makes several assumptions that are inherent to its application. These assumptions include:
1. Demand is known and constant: The EOQ model assumes that the demand for the product is constant and does not vary over time. This implies that the demand is accurately forecasted and remains stable throughout the ordering period.
2. Lead time is constant: The model assumes that the lead time, which is the time taken from placing an order to receiving it, is fixed and does not vary. This allows for accurate planning and calculation of reorder points.
3. Ordering costs and holding costs are known and constant: The model assumes that the costs associated with ordering (such as administrative costs, transportation costs) and holding inventory (such as storage costs, insurance costs) are known and remain constant over time. This enables the accurate calculation of total costs.
4. Stockouts are not allowed: The EOQ model assumes that stockouts are not permitted and that the inventory is replenished instantaneously when it reaches zero. This assumes that there are no costs or consequences associated with stockouts.
5. Price per unit is constant: The model assumes that the price per unit of the product remains constant regardless of the quantity ordered. This simplifies the calculation of total costs.
6. The entire order quantity is received at once: The model assumes that the entire order quantity is received in a single delivery. This implies that there are no partial deliveries or delays in receiving the ordered quantity.
It's important to note that these assumptions may not hold true in every real-world situation. However, the EOQ model provides a useful framework for inventory management under these assumptions, allowing businesses to optimize their order quantities and minimize costs based on the given constraints.
In conclusion, the EOQ model as presented in the chapter makes several assumptions, including constant demand, constant lead time, known and constant ordering costs and holding costs, no stockouts, constant price per unit, and instantaneous receipt of the entire order quantity. These assumptions form the basis for applying the EOQ model and optimizing inventory management decisions.
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Related Questions
Which formula is NOT correct?
A) COGS=COGAS-EI
B) BI=COGS+EI-P-FI
C) EI=BI+P+FI-COGS
D) COGAS=BI+P+FI
Answers
Answer:
Explanation:
The answer is d the correct formula is COGS=BI+P+FI
Use the following information for Exercises 8-40 and 8-41: Smooth Move Company manufactures professional paperweights and has been approached by a new customer with an offer to purchase 15,000 units at a per-unit price of $7.00. The new customer is geographically separated from Smooth Move's-other customers, and existing sales will not be affected. Smooth Move normally produces 82,000 units but plans to produce and sell only 65,000 in the coming year. The normal sales price is $12 per unit. Unit costinformation is as follows: Special-Order Decision Objective 2 Refer to the information for Smooth Move Company above. If Smooth Move accepts the order, no fixed manufacturing activities will be affected because there is sufficient excess capacity. Required: 1. What are the alternatives for Smooth Move? 2. Conceptual Connection Should Smooth Move accept the special order? By how much will profit increase or decrease if the order is accepted? Should Smooth Move accept the special order?
Answers
The alternatives for Smooth Move Company are as follows- Accept the offer and produce 15,000 units at $7.00 per unit, Accept the offer but raise the price to $9.50 per unit and Decline the offer and continue producing and selling at normal capacity and price.
2. Conceptual Connection Should Smooth Move accept the special order?Smooth Move should accept the special order.
The increase in profit due to accepting the special order would be calculated as follows:
Profit per unit = $12.00 - $8.00
= $4.00
Increase in profit per unit due to the special order = $7.00 - $8.00
= -$1.00
Total increase in profit due to special order = -$1.00 x 15,000
= -$15,000
Since the total increase in profit is negative, it appears that accepting the special order would result in a decrease in profit.
However, since the company has excess capacity and the fixed costs will not be affected, the special order will increase the company's total profits even if the per-unit profit decreases.
Therefore, Smooth Move Company should accept the special order.
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abc analysis generally divides on-hand inventory into three classes based upon ______.
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Inventory items are divided into three groups using the ABC analysis, typically based on annual units or quantities used.
What do you mean by inventory?
All of the items, materials, products, and merchandise that a business has on hand and intends to sell to clients for a profit are collectively referred to as inventory. If the vendor uses a vehicle to deliver newspapers to customers, only the newspaper will be counted as inventory. The car will be treated as a valuable asset. Although there are many more types of inventory, the four that are most frequently used are raw materials and components, work in progress, finished goods, and maintenance, repair, and operational supplies.
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What is the first step in the decision-making process?
Take action.
Get information.
Form a decision.
Identify the choices.
Answers
Answer:
Identify choices, Get information, Form a decision, and take action
Explanation:
The first step in the decision-making process is Get information. (Option B)
Why is this so?Before making a decision, it is crucial to gather relevant information and data related to the situation or problem at hand.
This includes identifying the key facts, understanding the context, and seeking out different perspectives or viewpoints.
Obtaining sufficient information helps in analyzing the situation, evaluating options, and making an informed decision based on available data and insights.
Without proper information, it becomes challenging to assess alternatives and make effective decisions.
Hence, the right answer is Option (B)
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the following information is available regarding the interest revenue recognized on a note receivable: face value fraction of the year the note was outstandingr interest revenue $50,000 3 months $1,500 question: what was the annual interest rate on this note?
Answers
Face value fraction of the year the note was outstanding interest revenue $50,000 3 months $1,500. So the annual interest rate on this note is 3%
Calculate annual interest rateThe annual interest rate on the note receivable can be calculated as follows:
Annual Interest Rate = ($50,000 + $1,500)/(face value x (3/12))
Since we have not been given the face value or length of the note, we can assume that the face value is $50,000 and the note was outstanding for a full year (12 months).
In this case, the annual interest rate would be:
Annual Interest Rate = ($50,000 + $1,500)/($50,000 x 1) = 3%.
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Explain one reason why a business may use social media to promote
Answers
Answer:
Social media offers many benefits to business owners, as it allows them to reach out to their customers and to gain the attention of more people/potential customers
Explanation:
Carlos is the VP Sales for a consumer electronics company and has recently been reviewing the performance feedback and employee satisfaction reviews. He noted that several sales representatives mentioned that they dissatisfied with the amount of commission they receive. Carlos wants to retain the best sales representatives rather than risk losing them to a competitor so he's trying to determine whether or not he should raise the percentage of commission representatives might receive on their sales. What management function best describes Carlos' activity?
Answers
Answer:
Compensation.
Explanation:
According to the information in the question above, it can be said that Carlos is exercising the function of compensation management. His functions are related to the compensation that employees receive for carrying out their work. Compensation managers are also responsible for maintaining the rules of benefits in compliance with management and legality, in addition to developing strategies that assist in retaining and hiring employees and all types of data and information on compensation in the organization.
An individual who wants to earn a living from a new business endeavor has decided to start his business as a not-for-profit organization. How can he earn money under this arrangement?
A. A not-for-profit organizing can earn profits for its owner through stock sales
B. The not-for-profit classification only applies to the sales of goods, not services
C. If he later incorporates his not-for-profit business, he can keep the profits from the transition
D. A not-for-profit business is allowed to use income to pay employees a reasonable salary
Answers
Answer:An incorporated business that puts all of its profits back into the business is a corporation. They are used by those common people and it can help the others who need the money. This will secure that the funds of these corporation will be shared also into its members incase of emergency.
Answer:
D. A not-for-profit business is allowed to use income to pay employees a reasonable salary
Explanation
just did it
Telmart, a retail chain, records high sales volume for most of its outlets. Some of its outlets that have low sales volume have conducted surveys for their consumers in order to understand the reasons behind this. The surveys reveal that the average customer in these outlets believes that price is an indicator of quality and thus, prefers higher priced brands over lower priced brands. The research conducted by telmart exemplifies:.
Answers
The research that Telmart did exemplifies what we know as Demand Analysis.
What is Demand Analysis?Refers to research that is done to see what influences customer demand. Is often done by companies to increase demand for their goods.In finding out why some outlets did not have high sales, Telmart was trying to find out what drove customer behavior so this is Demand Analysis.
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Jackson and ashley turner (both 45 years old) are married and want to contribute to a roth ira for ashley. in 2011, their agi is $177,500. jackson and ashley each earned half of the income.
a. how much can ashley contribute to her roth ira if they file a joint return
contribution to roth ira $
Answers
Ashley Turner would do a maximum contribution to IRA that will be -600.
It is given that the maximum contribution to ROTH IRA is 6000 for the people that are under the age of 50 years
We have,
\(209,000 - \frac{198000}{10000} \times 6000\)
= 6600
Then the contribution to the IRA is:
6000 - 6600 = -600
You can save money tax-advantageously for retirement by opening an individual retirement account (IRA). An individual can save for retirement with tax-free growth or on a tax-deferred basis by opening an IRA at a financial institution. Even when you are unable to make contributions, your account might still grow. You acquire interest, which is added to your account balance, and you subsequently acquire interest on the interest, and so on. Because of the wonders of compound interest, the growth that your account creates can rise annually.
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What type of estate involves a piece of real estate that's owned by multiple unrelated individuals who, in addition to their ownership rights, each hold the right to occupy the dwelling unit in one- to two-week intervals during the year
Answers
Timeshare is the type of estate involves a piece of real estate that's owned by multiple unrelated individuals
What does the word "Adu" mean?
A smaller, independent residential dwelling unit known as an auxiliary dwelling unit (ADU) is situated on the same property as a detached, standalone single-family home. ADUs are known by a variety of titles around the United States, including granny flats, secondary suites, and accessory apartments. Other names for mother-in-law apartments include granny flats, supplementary suites, guest houses, and pool houses. They are all classified as auxiliary dwelling units, or ADUs, which means that each one has a separate entrance, a full bathroom, and a kitchen, making it a separate living space.
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Monster music company provided music lessons to customers for $10,000, receiving $6,000 in cash and the rest on account. what is monster music company's revenue under the accrual basis of accounting?
Answers
The monster music company's revenue under the accrual basis of accounting is $10,000
What is the accrual basis of accounting?
Under the accrual basis of accounting, revenue is recognized when the goods have been delivered or services rendered regardless of when payment for goods or services is received.
The fact that Monster music company already provided the music lessons whose revenue is $10,000 means that it should recognize the revenue for the whole music lessons provided rather the portion whose cash payment has been received
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Which step directly follows "loss of jobs” in the stagflation cycle?
Answers
Answer:
fewer items produced
Explanation:
Answer:
D
Explanation:
henry suspects that some of his employees have been stealing from his company. he purchases a commercial crime insurance policy, which will cover any losses that actually occur during the policy period. under which coverage form of commercial crime insurance is henry's company insured?
Answers
Loss-Sustained form of commercial crime insurance henry's company insured.
The required details about commercial crime insurance is mentioned in below paragraph.
Insurance against business-related crimes, such as employee theft, forgery, robbery, and technological crime, protects against monetary damages. It is a kind of business insurance that offers protection for the company under the following types of policy: Employee dishonesty in Form A may be written as scheduled insurance or on a blanket insurance basis and covers money, securities, and other properties.
What are the commercial crime policy's exclusions?
The following things are not covered by commercial crime insurance: theft, misdemeanors, or other wrongdoing by you or your company partners. Additionally, it excludes any activities taken by personnel who colluded with one of your partners.
Thus, Henry company is insured under Loss-Sustained form.
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What is the over time pay rate
Answers
Answer:
overtime pay rate is the amount of money you would make from working overtime. sokets say you made 80,000 dollers a year and you staryed 15 hours your overtime pay rate
Explanation:
Overtime hours are hours worked over 40 in a single work week.
Example: At 45 hours for the week, Sasha worked five overtime hours in a week.
MARKETING/BUSINESS helpppp
Answers
Answer:
$8,470
Explanation:
Planned sales = 5000 units
selling price = $4
production cost= $1
Overhead = $5000
Social security = 15.3%
Revenue = units sold multiplied by the selling price
Revenue =5000 x 4
=$20,000
COGS =$5000 x 1 =$5000
Taxes =
Revenue :$20,000
Minus COGS: $5000
= Gross income: $15,000
Minus overhead: $5,000
=Net profit: $10,000
Minus taxes: $1,530( 15.3/100 x 10,000)
=NPAT: $8,470 ($10,000 -$1,530)
5 methods that maybe used to engage in trade w within the business environment.
Answers
The five main factors that influence international trade are: the existence of government regulations, variances in technology, variations in resource endowments, variations in demand, and the availability of economies of scale.
What techniques are employed to regulate global trade?Governments primarily use tariffs, subsidies, and quota systems to impose trade restrictions. A quota system places limits on the quantity of commodities that may be imported into a nation. Governments can limit the amount of imports to assist safeguard native businesses by using quota systems.
What drives people to trade?Trade is essential to the prosperity of the United States because it boosts economic expansion, promotes domestic employment, raises living standards, and enables citizens to sustain their families with reasonably priced goods and services.
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A customer opens an account and tells the broker to do whatever is prudent. what should the broker do?
Answers
The broker should obtain a signed power of attorney from the customer.
A broker is someone or firm who arranges transactions between a buyer and a dealer for a fee whilst the deal is done. A broker who additionally acts as a supplier or as a buyer will become a foremost party to the deal.
In general, before transacting customs enterprise on behalf of a customer, a customs broking is needed “to obtain a legitimate energy of attorney to accomplish that.” 19 C.F.R. 141.46. Neither CBP statutes nor regulations further elaborate as to whether or not digital signatures are accredited to execute a POA.
A power of attorney is a written document signed and recounted by way of one person (the essential) authorizing another man or woman (the lawyer in fact or agent) to behave on their behalf. The law, in particular, provides that the strength of a lawyer may additionally confer authority upon behavior banking transactions on behalf of the most important.
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explain what information is included in a director's report provide at least four points or examples
Answers
Answer:
General corporate information.
Operating and financial highlights.
Letter to the shareholders from the CEO.
Narrative text, graphics, and photos.
Management's discussion and analysis (MD&A)
Financial statements, including the balance sheet, income statement, and cash flow statement.
More items...•
Answer:
yah
Explanation:
explain what information is included in a director's report provide at least four points or examples
What are the benefits temporary employment offer employers?
Answers
1. They usually don't have to pay for thr insurance of the worker.
2. They can generally sack the worker out when there is no work.
3. The workers don't generally get pensions.
When reviewing desirable traits and backgrounds that foster employee success and retention, HR at Daymon seeks to hire people with any and all of the following characteristics except: a. People who bring a wealth of HR experience and who promote the status quo b. People who display a willingness to learn and keep learning c. People who may not have worked in HR before but who are willing to learn people who treat other d. People well and are kind and considerate. People who will ask, challenge, or question company HR philosophies
Answers
Answer:
Dube buses transport people from all over within South Africa
• Bank #1 • Bank name • Bank website address • Interest rate for CD, 6 months D • Interest rate for CD, 12 months . Interest rate for savings account . how do I do this?
Answers
Bank #1
Bank name: ABC Bank
Bank website address: www.abcbank.com
Interest rate for CD, 6 months: 1.5%
Interest rate for CD, 12 months: 2.5%
Interest rate for savings account: 0.5%
You can use this format to organize and present information about different banks and their interest rates for different types of accounts. Just be sure to provide accurate and up-to-date information, and to double-check any details before sharing them.
Currently a company that designs Web site has five customers in its backing. The time since the order arrived processing time and promised due dates are given in the following table. The customers are ready to be scheduled today, which is start of Due Date (days from Time Since Order Arrived days ag 8 Processing Time (days) Customer now) A 12 50 B 6 10 44 24 54 D 2 32 100 10 20 20 a Develop separate schedules by using the FCFS and EDO les Compare the schedules on the basis of average fow time and average days pas Using the FCFS (first come first served) decision ne for sequencing the customers, the order 2 3 4 Sequence 4 Customer E D C 0 Using the EDO ( de ) dan the order is to resolve a te, use the order in which the jobs were received) 2 3 4 Sequence Customer A C R D The average for time and average days pas for each option are (Enter your responses rounded to one decimal place) Average Flow Time Average Days Past Due Rule EDO FCFS
Answers
FCFS Customer Time Since Order Arrived (days ago) Processing Time (days) Due Date (days from now) Start Date Finish Date Flow Time (days) Days Past Due
A 12 50 8 12 62 50 -
B 6 10 10 16 26 10 -
C 4 20 24 28 48 24 -
D 2 32 54 56 88 32 32
EDO
Customer Time Since Order Arrived (days ago) Processing Time (days) Due Date (days from now) Start Date Finish Date Flow Time (days) Days Past Due
A 12 50 8 12 62 50 0
C 4 20 24 16 36 20 8
B 6 10 10 26 36 10 -
D 2 32 54 38 70 32 16
As you can see, the average flow time for the FCFS rule is 38.6 days, while the average flow time for the EDO rule is 31.8 days. This means that the EDO rule is more efficient than the FCFS rule. The average days past due for the FCFS rule is 16.4 days, while the average days past due for the EDO rule is 8.2 days. This means that the EDO rule is less likely to cause customers to be late.
Here is a table that summarizes the results:
Rule Average Flow Time (days) Average Days Past Due
FCFS 38.6 16.4
EDO 31.8 8.2
As you can see, the EDO rule is more efficient and less likely to cause customers to be late than the FCFS rule.
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What are two major advantages and two major disadvantages of having unions in the United
States? Explain each advantage or disadvantage.
Answers
Answer:
two major advantages of unions:
1. we get more items from different countries
2. Unions promote higher wages and better benefits
two major disadvantages:
1. Labor unions discourage individuality
2. Unions can drive up costs as well as making it harder to promote and terminate workers.
Which of these is an educational institution where you can complete an undergraduate
study program in order to get a bachelor's degree?
A 2 year ollege
B Technical School
C Certificate program
D 4 year College
Answers
Charger Company is implementing a new complex task consisting of 150 complex steps. The internal operations analysts expect productivity in performing this new task to improve in part from labor productivity and management efficiency. The analysts expect this type of productivity to cease _________.
A. after about two or three years.
B. after about 3 months.
C. after repeating the task 50 times.
D. after repeating the task 100 times
Answers
The productivity improvement in performing the new complex task is expected to cease after about two or three years. Option A.
The statement suggests that productivity in performing the new complex task is expected to improve due to labor productivity and management efficiency. However, it does not specify the exact timeframe for when this productivity improvement will cease.
The cessation of productivity improvement will likely depend on various factors, including the nature of the task, the level of complexity, the skills of the workers, and the effectiveness of management strategies.
It is unlikely that productivity improvement will cease after just three months or after repeating the task 50 times. Improvement in productivity usually occurs gradually over time as employees gain experience and familiarity with the task, and as management identifies and implements more efficient processes.
The option of ceasing productivity improvement after about two or three years seems more plausible.
With the completion of the task repeatedly over this extended period, employees would have had ample time to optimize their performance and become highly skilled. Additionally, management would have had the opportunity to refine their strategies and identify areas for improvement.
After a few years, the productivity gains from labor and management efficiency may start to plateau as the task becomes more routine and the scope for further optimization diminishes.
In summary, the productivity improvement in performing the new complex task is expected to cease after about two or three years , considering the gradual optimization and refinement of labor productivity and management efficiency. So Option A is correct.
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A budget that allocates increased or decreased funds to a department by using the last budget period as a reference point is called a(n)_____. A) standardized budget B) fixed budget C) zero-based budget D) incremental budget E) tactical budget
Answers
Answer:
D) incremental budget
Explanation:
An incremental budget is a budget in which the budget is prepared based on the last year budget or the actual performance so that the amounts that are increased or decreased could be added for the current year budget
Here in the given situation, the allocation of the budget is either increased or decreased by using the previous year budget is known as incremental budget
hence, the correct option is D. Incremental budget
The Temple University College of Business is seeking to purchase new monitors for its classrooms, computer labs, faculty, and staff offices. It creates a description of the project and asks suppliers to submit bids. The university identifies the top two or three suppliers who present the most competitive packages and will begin discussions with each supplier to determine which company will be awarded the contract. This is an example of the _______ method of business buying.
Answers
the online buying to see which company is offering affordable goods
what is the portion of a market controlled by a particular company or product? Choose the answer.
a) market share
b) market goal
c) sales funnel
d) market budget
Answers
Answer:
a) market share
Explanation:
The market share refers to the portion of a market controlled by a particular company or product. It is calculated by dividing the company's sales within a specific market by the total sales within that market. Market share is important for companies because it can help them gauge their relative position in the market, understand their target audience, and make strategic decisions about future growth and development.
you invest $500 to buy $1000 worth of stock on margin. the value of the stock drops by 50%. you sell it. approximately how much of your original $500 investment are you left with in the end?
Answers
When you buy stock on margin, you borrow money from your broker to purchase more shares than you could with just your own funds. In this case, you invested $500 and borrowed another $500 to buy $1000 worth of stock.
If the value of the stock drops by 50%, then the value of your investment is cut in half to $500. Since you bought the stock on margin, you still owe your broker the $500 you borrowed plus any interest or fees.
When you sell the stock, you will receive $500 from the sale. However, you still owe your broker $500, so you will need to use that money to pay off your margin debt.
Therefore, you will be left with nothing from your original $500 investment, as all of it was used to pay off your margin debt. In fact, if there were any interest or fees associated with the margin account, you may actually end up owing your broker more than your initial investment.
In the end, you are left with none of your original $500 investment; you have lost the entire amount.
When you invest $500 to buy $1000 worth of stock on margin, you are essentially borrowing the remaining $500 from your broker. If the value of the stock drops by 50%, let's calculate the losses and see how much of your original $500 investment you are left with:
Initial investment (your own money): $500
Borrowed money (margin): $500
Total investment: $500 (your own) + $500 (borrowed) = $1000
If the value of the stock drops by 50%, the value of the stock becomes 50% of its original value:
New stock value = $1000 * 0.50 = $500
Now, you decide to sell the stock. The proceeds from the sale are $500.
However, you also need to repay the borrowed money (margin) to the broker. You borrowed $500 on margin, so you need to pay back that amount:
Proceeds from the sale: $500
Borrowed money (margin repayment): $500
After repaying the margin, you're left with $0 from the sale of the stock. Since you initially invested $500 of your own money, you have incurred a loss of $500.
So, in the end, you are left with none of your original $500 investment; you have lost the entire amount.
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