... Economic order quantity (Q*) is given by: (c) Order quantity more than 50 sheets: unit price $17.25 2 u (Total demand) u (Ordering cost) Q Holding cost 2 u 100 u 45 Q 51.1 units or 51 units 0.20 u 17.25 where the total â¦ economic order quantity (EOQ), and when production feeds demand, it utilizes the economic production quantity (EPQ). b. Correct. 11 A company has a capital employed of $200,000. 4. my supervisor would prefer i use a rating scale (1-5) to ask questions on firm size. Example 1 solutions Re-order levels As important as how much to order at a time is the question of when to order more stock. What is the companyâs return on investment? (a) Ascertain the economic order quantity and the number of orders each of the economic order quantity, to be placed for the component in a year. This is not an easy question to answer, but it makes for good discussion. Its residual income is $36,000. 6. A 30% B 12% C 18% D 22% 12 A company has calculated a $10,000 adverse direct material variance by subtracting its flexed budget direct material cost from its â¦ Question 31b - September 2016 Nesud Co has credit sales of $45 million per year and on average settles accounts with trade payables after 60 days. 6. In fixed-time period systems the time between orders, T, is constant, and the order quantity varies. If an order is placed too late, when stocks have been allowed to run â¦ Sample Practice Questions, Answers, and Explanations 903 7. Abusive acts can be: a. (b) Assuming that the average daily consumption of the above component is 14 units and that the normal lead time is 15 days, calculate the ordering level for the component, where â¦ 3. It has a cost of capital of 12% per year. Establish the economic order quantity (EOQ) ignoring the discount opportunities. Eoq questions 1. Abuse is distinguished from noncompliance in that abusive conditions may You should write the letter of your choice (a, b, c, or d) clearly in the box before the relevant question. Orders bring the IP to a target level, R. 9-33 It is one of the oldest classical production scheduling models. Abuse occurs when the conduct of an activity or function falls short of expectations for prudent behavior. There are 30 questions and you have 120 minutes. Each question has only one correct answer. ANSWER for Exercise 1: Since Cindy knows that Mindy learned only the EOQ model during her MBA, Cindy safely assumes that Mindy uses the EOQ formula which yields R = Q2h 2K = 102 â400 2â200 = 100=year: Competitors can use each otherâs demand information while formulating sales strategies such as price dis-counts, sales â¦ 2. Download Full PDF Package. Professionals, Teachers, Students and Kids Trivia Quizzes to test your knowledge on the subject. Determine if the discount offer should be accepted. A correct answer is worth 1 point. i am working on inventory management strategies and firm performance and i am controlling for firm size. One of its suppliers has offered the company an early settlement discount â¦ Keywords: Economic order quantity, Inventory management, Inventory control Introduction This model is known asEconomic order quantity (EOQ) model, because it established the most economic size of order to place. Q1 â¢ Annual Demand = 1,000 units â¢ Days per year considered in average daily demand = 365 â¢ Cost to place an order = $10 â¢ Holding cost per unit per year = $2.50 â¢ Lead time = 7 days â¢ Cost per unit = $15Determine the economic order quantity and the reorder point. The Economic Order Quantity (EOQ) is the number of units that a company should add to inventory with each order to minimize the total costs of inventory-such as holding costs, and order costs (If several answers seem possible to you, choose the best one). a. 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