fbpx

Analysis of the Ordering Cost Assignment | Homework For You

Managers at Fluid Induction Industries are reviewing the economic feasibility of manufacturing a part that the company currently purchases from a supplier. Forecasted demand for this part is 16,800 units. Fluid operates 250 days per year.Homework For You

Don't use plagiarized sources. Get Your Assignment on
Analysis of the Ordering Cost Assignment | Homework For You
Just from $13/Page
Order Now

Fluid’s financial analysts established the cost of 9% for the use of funds for investments within the company. Also, over the past year $2,200,000 was the average investment in the company’s inventory. Accounting information shows that a total of $101,000 was spent on taxes and insurance related to the company’s inventory.  Additionally, an estimated $29,000 was lost to inventory shrinkage, this included broken and damaged goods, and pilferage. $100,000 was spent on warehouse overhead, including expenses for heating and lighting.

Two hours are required to process and coordinate an order for the part regardless of the quantity ordered. Purchasing salaries average $28 per hour, including benefits. A detailed accounting analysis on 1,250 orders revealed that $25,000 was expensed for internet, paper and postage directly related to this ordering process.

Lead time for this part is one-week. The use of the part during the lead time is normally distributed with a mean of 960 units and a standard deviation of 16 units. The company’s policy regarding stock-outs is that one stock-out per year is permitted.

The company has a current contract to purchase the part from the supplier for $90 per unit. Fluid has increased its manufacturing capacity and is considering producing the part in house. The utilization of the increased capacity will produce at a rate of 4,800 units per month with up to 5 months of production time available. Management believes that with a two-week lead-time it can schedule the production of the part when needed. . The use of the part during the lead time is normally distributed with a mean of 1,280 units and a standard deviation of 200 units.  Production costs are estimated at $76.50 per unit.

A major concern for the company is the fact that it will take two full 8 hour shift to set up the equipment. The total cost of labor is estimated to be $150 per hour.

Managers at Fluid Induction Industries are reviewing the economic feasibility of manufacturing a part that the company currently purchases from a supplier. Forecasted demand for this part is 16,800 units. Fluid operates 250 days per year.

Fluid’s financial analysts established the cost of 9% for the use of funds for investments within the company. Also, over the past year $2,200,000 was the average investment in the company’s inventory. Accounting information shows that a total of $101,000 was spent on taxes and insurance related to the company’s inventory.  Additionally, an estimated $29,000 was lost to inventory shrinkage, this included broken and damaged goods, and pilferage. $100,000 was spent on warehouse overhead, including expenses for heating and lighting.

Two hours are required to process and coordinate an order for the part regardless of the quantity ordered. Purchasing salaries average $28 per hour, including benefits. A detailed accounting analysis on 1,250 orders revealed that $25,000 was expensed for internet, paper and postage directly related to this ordering process.

Lead time for this part is one-week. The use of the part during the lead time is normally distributed with a mean of 960 units and a standard deviation of 16 units. The company’s policy regarding stock-outs is that one stock-out per year is permitted.

The company has a current contract to purchase the part from the supplier for $90 per unit. Fluid has increased its manufacturing capacity and is considering producing the part in house. The utilization of the increased capacity will produce at a rate of 4,800 units per month with up to 5 months of production time available. Management believes that with a two-week lead-time it can schedule the production of the part when needed. . The use of the part during the lead time is normally distributed with a mean of 1,280 units and a standard deviation of 200 units.  Production costs are estimated at $76.50 per unit.

A major concern for the company is the fact that it will take two full 8 hour shift to set up the equipment. The total cost of labor is estimated to be $150 per hour.

Develop a managerial report that will address the question as to whether the company should purchase or manufacture the part itself. Include the following factors in your report:

Question:1. An analysis of the ordering cost.Get Finance homework help today

Calculate your paper price

Pages(550 words)

Approximate price:-

Why Choose Our Assignment Writing Services

Quality Assignment Papers

We aim at 100% customer satisfaction. As such, we never compromise on the quality of our assignment services. Our homework helpers craft each paper carefully to match the requirements on the instruction form.

Professional Homework Helpers

We receive many applications from writers around the world daily. Nevertheless, we only choose the cream of the crop to tackle your “help with homework” requests. Hence, our homework helpers are highly-qualified individuals who maintain our quality policy.

Affordable Homework Help

We maintain a fair pricing policy for all our homework help services. Our pricing system generates quotations based on the requirements of each paper.

On-Time Assignment Delivery

At My Homework Writers, we guarantee all students swift delivery of their assignments. We understand that time is an essential factor in the academic world. We, therefore, ensure that all assignments are delivered on or before the agreed deadline.

100% Original Assignment Papers

We maintain a zero-plagiarism policy in all our essay papers. Our assignment writers stick to the students’ instructions to deliver plagiarism-free papers. We are also keen to avoid any chance of similarities with previously written papers.

24/7 Customer Support

We understand that you might run into trouble once in a while when working with our system. In the event that you do run into trouble, please get in touch with our support agents and they will immediately provide you with assistance.

Feel free to contact us via the Chat window or email: support@myhomeworkwriters.com.

How myhomeworkwriters works?

Follow these simple steps to get your homework done

1). Place your order

Fill in the order form and provide all details of your assignment.

2). Proceed with the payment

Choose the payment system that suits you most.

3). Track Progress

You will be able to track the progress of your paper from our system.

4). Receive the final file

Once your paper is ready, we will email it to you.

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
$0.00

Our Assignment Writing Services

Myhomeworkwriters website holds a reputation for providing high-quality assignment writing services. You only need to give us all the requirements for your “do my homework” order, and our homework paper writers will give you the best results.

Essay Writing Services

We have highly qualified essay writers to assist you whenever you place in "help with my homework" order. Our essay writing service is designed to help students get good grades.

Admission Essay Writing service

Our admission essay writing help will assist you to secure a position at your desired learning institution. We will help you craft a top-notch personal statement paper. Our writers who know how to write a college admission essay will help you get the college admission you are longing for.

Editing and Proofreading

Our team of professional editors will help you organize your paper, paraphrase it, and eliminate any possible mistakes. Also, we will help you check on plagiarism to ensure that your final paper possesses quality and originality.

Technical papers

My homeworkwriters harbors specialists who can handle your technical papers order. Our “write my homework” services cover all academic areas you can think of. The simplicity or complexity of the paper does not affect the quality of assignment writing services.