Malburn Construction Ltd. Manufactures and distributes window frames. The company uses 600,000 metal strips in producing the frames for the year. Each strip cost $15, the storage cost is 10% of the cost price and $180 is required to make an order. (i). Find the order size Malburn Construction needs to minimize its inventory costs. Calculate for the company: (ii). the number of orders placed per year. (iii).the length of the stock cycle in days. (iv). the annual ordering cost (v). the annual holding cost (vi). the total annual cost
Malburn Construction Ltd. Manufactures and distributes window frames. The company uses 600,000 metal strips in producing the frames for the year. Each strip cost $15, the storage cost is 10% of the cost price and $180 is required to make an order. (i). Find the order size Malburn Construction needs to minimize its inventory costs. Calculate for the company: (ii). the number of orders placed per year. (iii).the length of the stock cycle in days. (iv). the annual ordering cost (v). the annual holding cost (vi). the total annual cost
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 2CE
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Malburn Construction Ltd. Manufactures and distributes window frames. The company uses 600,000
metal strips in producing the frames for the year. Each strip cost $15, the storage cost is 10% of the cost
price and $180 is required to make an order.
(i). Find the order size Malburn Construction needs to minimize its inventory costs.
Calculate for the company:
(ii). the number of orders placed per year.
(iii).the length of the stock cycle in days.
(iv). the annual ordering cost
(v). the annual holding cost
(vi). the total annual cost
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