Business Inventory Control Meghan Farrar, Amanda May, Nancy Dinges, Scott Moore and Bianca Holmes American Public University Introduction “Inventory is one of the most expensive and important assets to many companies, representing as much as 50% of total invested capital. Managers have long recognized that good inventory control is crucial” (Render et al, 2011). Therefore, it is really no surprise that companies place such a high importance on inventory control. An analysis
Words: 1944 - Pages: 8
the inventory carrying cost if weekly demand is 130 units, the value of the item is $70 and the carrying cost is 18% of the item value. For this (formula beings: inventory carrying cost = cost of owning inventory per year/inventory value AND/OR carrying cost x inventory value) I’ve received a few different answers that no matter how right I do the formula and plug in the numbers do… do not look right, at all: 2,628,888.889 as well as 50555.555556 and 505%. 5. If your average daily demand is 70 units
Words: 477 - Pages: 2
ACCOUNTING FOR MATERIALS – MATERIALS Definition Materials: | In cost accounting material is defined as the part of inventory. Basically, material and raw material are used for same purpose. This is main part of total cost of production. It can reduce or increase according to the fluctuation in production. So, this is very flexible and controllable source of production. For making furniture, wood is the material. 60% to 70% proportion in the total cost of production will be material cost
Words: 10570 - Pages: 43
Teaching the Costs of Uncoordinated ; Supply Chains Charles L. Munson • Jianli Hu College of Business and Economics, Washington State University, PO Box 644736, Pullman, Washington 99164-4736 munson@'ivsu.edu • hu@mail.wsu.edu , Meir J. Rosenblatt (deceased) formerly Professor at Washington University in St. Louis, Missouri, and Technion—Israel Institute of Technology This paper was refereed. Supply-chain management has become a prominent area for teaching and research. Academics and managers
Words: 9477 - Pages: 38
A REPORT ON INVENTORY MANAGEMENT IN DIGILINK Submitted by MONIKA AGARWAL Regd No. – 09KB045 in partial fulfillment for the award of the degree of PGDM program at Krupajal Business School, Bhubneshwar UNDER THE FACULTY GUIDE : UNDER THE COMPANY GUIDE : Sushant Mishra Mr. Mourya Banerjee KBS, Bbsr Territory Head-North East
Words: 12199 - Pages: 49
Chapter 10 THE PRODUCTION BUSINESS PROCESS TEACHING TIPS I usually gloss over the materials on job costing, for my students have covered job costing in their Cost/Managerial course. I do emphasize the need for good ledger control over property, plant, and equipment. THE PRODUCTION BUSINESS PROCESS Production Planning and Control. A sales order or sales forecast cause the creation of production orders which specify items that should be produced. Materials are requisitioned and production is scheduled
Words: 5358 - Pages: 22
transaction = $80. With 150 transactions per week, annual demand R is estimated to be = 150×52×80 = 624,000. With cost of money of 10%, unit holding cost, H = $0.10 / year Then, the economic quantity to place in the ATM machine is given by the EOQ formula: The number of times the ATM needs to be filled = R/Q = 624000/35327 = 17.66 per year. Problem 6.8 Changeover time = 4hrs resulting in a fixed cost, S = 4 × 250 = $1,000. Annual demand, R = 1000/mo × 12 = 12,000 units / yr. Unit cost
Words: 252 - Pages: 2
EOQ Practices Q1: Suppose you are responsible for ordering inventory. You have the following information. It costs $5 to hold one widget in inventory for a year It costs $100 to place an order for widgets, regardless of size Customers demand 2,500 widgets every year (Sales are distributed evenly throughout the year) Solution: = square root of [(2 x 2,500 x 100) / 5] = square root of (100,000) = 316.228 E0Q = 316 ------------------------------------------------- Q2: The I-75 Carpet
Words: 311 - Pages: 2
SOME USEFUL FORMULAS Rights R + S = X R = {N( M-S )}/(N+1 ) X = ( NM + S )/(N+1 ) Financial Future Value FV = PV (1 + i)n Present Value PV = FV (1 + i)-n Annuity Future Value FV = PMT {[(1 + i)n - 1]/ i} Annuity Present Value PV = PMT {[1 - (1 + i)-n]/ i} Perpetuity PV = Pmt /i Dividends No growth P0 = d1 /r Dividends constant growth P0 = d1 /(r - g) Effective interest rate ie = (1 + i)m - 1 Net Present Value NPV = PV of future cash flows less Cost of
Words: 560 - Pages: 3
SUMMARY 1. EOQ model 2. EOQ cost analysis (problem 1) 3. EOQ model 4. EOQ model 5. Noninstantaneous receipt model 6. Shortage model 7. EOQ model and reorder point 8. EOQ model and reorder point 9. Noninstantaneous receipt model 10. Noninstantaneous receipt model 11. EOQ model and reorder point 12. Noninstantaneous receipt model 13. Shortage model 14. Shortage model 15. Shortage model 16. Quantity discount model 17. EOQ model 18. EOQ model 19. Noninstantaneous receipt model 20. EOQ model 21. EOQ model
Words: 4223 - Pages: 17
