Answer:
IRR for A= 35.33%
IRR for B = 31.88%
Explanation:
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested
IRR can be calculated using a finacial calculator :
IRR for cash flow A
Cash flow in year 0 = −$ 68,000
Cash flow in year 1 = $44,000
Cash flow in year 2 = $38,000
Cash flow in year 3 = $25,000
Cash flow in year 4 = $15,600
IRR = 35.33%
IRR for cash flow A
Cash flow in year 0 = −$ 68,000
Cash flow in year 1 = $30,200
Cash flow in year 2 = 34,200
Cash flow in year 3 = $40,000
Cash flow in year 4 = $24,200
IRR = 31.88%
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button
On January 1, 2017, Crane Company decided to begin accumulating a fund for asset replacement five years later. The company plans to make five annual deposits of $64000 at 10% each January 1 beginning in 2017. What will be the balance in the fund, on January 1, 2022 (one year after the last deposit)
Answer:
Balance in the account on January 1, 2022 =$820,525.44
Explanation:
Ordinary annuity is that in which the annual cash flow occurs at the end of each year for certain number of years.
Where the cash flow occurs at the beginning of the period, it is known as annuity due. The deposit scheme decided by Crane Company is annuity due, so we would need to work out the future value of an annuity due as follows:
Future Value of Annuity Due (FVAD): This represents the total sum that would accrue where the annual cash flow( each occurring at the beginning of the year) is compounded at a particular rate. It can be determined as
FV = A×( (1+r)^n - 1)/r)× (1+r)
This is the same formula as the ordinary annuity but with an additional provision for the the first cash flow to earn interest. This is effected by multiplying the ordinary annuity formula with (1+r)
Now, we can apply this formula to our question:
DATA
A-cash flow- 64,000
r- discount rate-10%
n-number of years- 5
FV = 64,000 × ( 1.1^5 - 1)/0.05 × 1.05 = 820,525.44
FV = 820,525.44
Balance in the account on January 1, 2022 =820,525.44
Selected data concerning operations of Cascade Manufacturing Company for the past fiscal year follow:
Raw materials used ..... $300,000
Total manufacturing costs charged to production during the year (includes raw materials, direct labor, and manufacturing overhead applied at a rate of 60 percent of direct labor costs) ..... 681,000
Cost of goods available for sale ...... 826,000
Selling and general expenses ...... 30,000
Beginning Inventories
Raw materials ...... $70,000
Work-in-process...... 85,000
Finished goods ...... 90,000
Ending Inventories
Raw materials ...... $80,000
Work-in-process ...... 30,000
Finished goods ....... 110,000
Determine each of the following:
a. Cost of raw materials purchased
b. Direct labor costs charged to production
c. Cost of goods manufactured
d. Cost of goods sold
Answer:
a. Purchases $310,000
b. Direct labor $ 238,125
c. Cost of goods manufactured $ 736,000
d. Cost of goods sold $ 716,000
Explanation:
Cascade Manufacturing Company
Raw materials used ..... $300,000
Add Raw materials Ending ...... $80,000
Less Raw materials Beginning...... $70,000
a. Purchases $310,000
Add Raw materials Ending to Raw materials used and subtract Raw materials Beginning to get Raw materials Purchases.
Total manufacturing costs $ 681,000
Less Raw materials used ..... $300,000
Conversion Costs $ 381,000
Conversion Costs = Direct Labor + Factory Overhead
$ 381,000= x + 0.6 x
$ 381,000= 1.6x
b. x= Direct labor = $ 381,000/1.6= $ 238,125
Factory Overhead= 0.6 *$ 238,125= $ 142875
Find Conversion Costs and then apply the ratio to get the direct labor costs.
c.
Cascade Manufacturing Company
Cost of goods manufactured
Raw materials Beginning...... $70,000
Add Purchases $310,000
Less Raw materials Ending ...... $80,000
Raw materials used ..... $300,000
Add Direct labor $ 238,125
Factory Overhead $ 142875
Total manufacturing costs $ 681,000
Add Work-in-process Beginning...... 85,000
Cost of goods available for manufacture $ 766,000
Less Work-in-process Ending...... 30,000
Cost of goods manufactured $ 736,000
Add and subtract as above to get the Cost of goods manufactured.
d. Cascade Manufacturing Company
Cost of goods sold
Raw materials Beginning...... $70,000
Add Purchases $310,000
Less Raw materials Ending ...... $80,000
Raw materials used ..... $300,000
Add Direct labor $ 238,125
Factory Overhead $ 142875
Total manufacturing costs $ 681,000
Add Work-in-process Beginning...... 85,000
Cost of goods available for manufacture $ 766,000
Less Work-in-process Ending...... 30,000
Cost of goods manufactured $ 736,000
Add Finished goods Beginning...... 90,000
Cost of goods available for sale $ 826,000
Less Finished goods Ending....... 110,000
Cost of goods sold $ 716,000
Add and subtract as above to get the Cost of goods sold.
Firms that compete in the global marketplace typically face two types of competitive pressures, namely, the pressures for _______ and _______.
a. global integration; local responsiveness
b. politically sensitivity; market leadership
c. cost reductions; marginal costs
d. price reductions; cost reductions
Answer:
a. global integration; local responsiveness.
Explanation:
A competitive pressure in business management can be defined as the degree of competition faced by a firm which involves the process of seeking to have a significant share of the available customers and market in a specific industry.
Firms that compete in the global marketplace typically face two types of competitive pressures, namely, the pressures for global integration and local responsiveness.
A global integration can be defined as the degree to which a particular firm can make use of the available resources, products and methods in another country.
On the other hand, local responsiveness can be defined as the extent to which a particular firm must customize or tailor its products and methods of production in order to meet conditions in another country.
Fiedler's contingency model of leadership has made an important and lasting contribution to the study of leadership because it: Group of answer choices suggests that organizations need to engineer the situation to fit the leader's preferred style. is the only theory to adopt the implicit leadership perspective. was the first theory to recognize the existence of leadership substitutes. discovered that effective leaders do not have a common set of competencies. is the only leadership theory to adopt a contingency approach.
Answer:
suggests that organizations need to engineer the situation to fit the leader's preferred style.
Explanation:
Fiedler is of the view that a person's leadership style is a product of experiences throughout their lifetime. So it is difficult to change it.
He suggested that instead of teaching a particular leadership style and forcing people to align with them, it is better to adjust the situation to an individual's leadership style.
The weakness of this is that the leader may be more effective in a particular situation and weak in another one
Sell Inc.'s stock has a 25 percent chance of producing a 30% return, a 50 percent chance of producing a12% return, and a 25 percent chance of producing a 5% return. What is the firm's expected rate of return?
Answer:
r = 0.1475 or 14.75%
Explanation:
The expected rate of return or r is the average return that is expected from the stock. It is the expected rate of profit or loss that an investor can anticipate on an investment whose returns are known or anticipated.
The expected rate of return of can be calculated as follows,
r = pA * rA + pB * rB + ... + pN * rN
Where,
pA, pB and so on represents the probability of an event or return occuringrA, rB and so on are the return in different eventsr = 0.25 * 0.3 + 0.5 * 0.12 + 0.25 * 0.05
r = 0.1475 or 14.75%
Unable to borrow from other banks, University Bank is forced to turn to the Federal Reserve for needed funds. The interest rate that the Federal Reserve will charge University Bank is called the
Answer:
Discount rate
Explanation:
The discount rate is the rate of interest i.e. charged by the Fed for extending the loan to the commercial bank
In order to apply the expansionary monetary policy, Fed redcued the discount rate and apply the contractionary monetary policy so that the Fed could raise the interest rate
Therefore in the given case, the charge we called as a discount rate
Luther Corporation
Consolidated Income Statement
Year ended December 31 (in $millions)
2006 2005
Total sales 610.1 578.8
Cost of sales (500.2) (355.3)
Gross profit 109.9 223.5
Selling, general, and
administrative expenses (40.5) (38.7)
Research and development (24.6) (21.8)
Depreciation and amortization (3.6) (3.9)
Operating income 41.2 159.1
Other income −− −−
Earnings before interest and taxes (EBIT) 41.2 159.1
Interest income (expense) (25.1) (15.3)
Pretax income 16.1 143.8
Taxes (5.5) (50.33)
Net income 10.6 93.47
Price per share $16 $15
Sharing outstanding (millions) 10.2 8.0
Stock options outstanding (millions) 0.3 0.2
Stockholders' Equity 126.6 63.6
Total Liabilities and Stockholders' Equity 533.1 386.7
Refer to the income statement above. Luther's operating margin for the year ending December 31, 2005 is closest to:_________.
A. 13.7413.74%
B. 21.9921.99%
C. 27.4927.49%
D. 32.9932.99%
Answer:
27.48%
Explanation:
Calculation for Luther's operating margin for the year ending December 31, 2005
Using this formula
Operating margin = Operating income / Sales
Let plug in the formula
Operating margin= 159.1/578.8
Operating margin=0.2748*100
Operating margin=27.48%
Therefore Luther's operating margin for the year ending December 31, 2005 is 27.48%
Venture Capital Corporation loans Wally $15,000 to start a new business.Wally does not pay,but Venture fails to sue within the time prescribed by the applicable statute of limitations.Wally's promise to pay the debt even though recovery is barred:_________
A) needs new consideration.
B) needs no consideration.
C) is unenforceable regardless of any consideration.
D) needs legally sufficient and adequate consideration.
Answer:
B) needs no consideration.
Explanation:
In this scenario, Wally's promise to pay the debt even though recovery is barred needs no consideration. This is mainly due to the fact that the Corporation failed to sue within the statute of limitation that was set. Meaning they can no longer sue Wally in order to recover the loan that was given to him. If they were to try and sue Wally now the lawsuit would just be dismissed with no consideration given.
Norris Co. has developed an improved version of its most popular product. To get this improvement to the market, will cost $48 million and will return an additional $13.5 million for 5 years in net cash flows. The firm's debt-equity ratio is .25, the cost of equity is 13 percent, the pretax cost of debt is 9 percent, and the tax rate is 30 percent. What is the net present value of this proposed project?
Answer:
NPV = $1.49 million
Explanation:
The NPV is the difference between the PV of cash inflows and the PV of cash outflows. A positive NPV implies a good investment decision and a negative figure implies the opposite.
NPV of an investment:
NPV = PV of Cash inflows - PV of cash outflow
But we will need to work out the discount rate to be used for discounting the cash flows. Hence, we need to determine the cost of capital as follows:
Step 1: After-tax cost of debt
After tax cost of debt = pre-tax cost of debt × (1-tax rate rate)
= 9%× (1--0.3)=6.3%
Step 2 : Weighted Average cost of capital (WACC)
WACC=( 0.25×6.3%) + (0.75× 13%) =11.325 %
Step 3:Net Present Value (NPV)
PV of cash inflow= (1- (1.11325^-5)/0.11325)× 13.5 = 49.49 million
Initial cost = $48 million
NPV = 49.49 million - $48 million =$1.49 million
NPV = $1.49 million
Steady Company's stock has a beta of . If the risk-free rate is and the market risk premium is , what is an estimate of Steady Company's cost of equity?
The question is incomplete as it misses the figures. The following is the complete question.
Steady Company's stock has a beta of 0.21. If the risk-free rate is 6.2% and the market risk premium is 6.9%, what is an estimate of Steady Company's cost of equity?
Answer:
The cost of equity is 0.07649 or 7.649%
Explanation:
The required rate of return or cost of equity capital is the rate required by the investors to invest in a stock based on the systematic risk of the stock as measure by the beta. The required rate of return or cost of equity can be calculated using the CAPM equation. The CAPM equation is,
r = rRF + Beta * rpM
Where,
rRf is the risk free raterpM is the risk premium on marketr = 0.062 + 0.21 * 0.069
r = 0.07649 or 7.649%
A company was moving from one part of the city to another. During the move, a truck carrying computer equipment worth more than $250,000 was trapped in a flooded underpass, and the equipment was destroyed. Fortunately, the company was insured under several policies. The policy that would most likely cover the computer equipment during the move from one facility to another is
Answer:
Causality policy
Explanation:
This policy makes provision for an organization or individual to be insured against any damage to property as a result of negligent acts or omissions.
In this case the property–$250,000 worth of computer equipment held inside the truck was trapped in a flooded underpass, and the circumstances shows there may have likely been negligence on the part of the truck driver.
What best explains why a firm's ratio of long-term debt/total capital is lower than the industry average, while the ratio of income before interest and taxes/debt interest charges is higher than the industry average
Answer:
The lower ratio of long-term debt to total capital is explained by the fact that the company is not highly geared or leveraged in comparison to the industry average firm.
This also explains why the ratio of income before interest and taxes to the debt interest charges is higher than the industry average because the firm does not pay so much in interest expense as the average firm in its industry.
Explanation:
Company X's leverage determines its ratio of long-term debts to total capital. If Company X has large long-term debts it will have a higher long-term debts to total capital ratio and vice versa. In that situation, Company X will also pay more in interest, causing its ratio of income before interest and taxes to the interest charges to be higher than the industry average, and vice versa.
The law of comparative advantage indicates that if a group of individuals wants to maximize their joint output, then each good should be supplied by
Answer:
b. the low opportunity cost producer.
Explanation:
Here are the options to this question :
a. the person with the lowest wage rate.
b. the low opportunity cost producer.
c. the person with the most advanced technical knowledge.
d. the person that can accomplish the task most rapidly.
a country has comparative advantage in production if it produces at a lower opportunity cost when compared to other countries.
For example, country A produces 10kg of beans and 5kg of rice. Country B produces 5kg of beans and 10kg of rice.
for country A,
opportunity cost of producing beans = 5/10 = 0.5
opportunity cost of producing rice = 10/5 = 2
for country B,
opportunity cost of producing rice = 5/10 = 0.5
opportunity cost of producing beans = 10/5 = 2
Country A has a comparative advantage in the production of beans and country B has a comparative advantage in the production of rice
"A customer owns 200 shares of ABC, purchased 2 years ago at $50 per share. The current market value of ABC stock is $60 per share. If the customer gifts the stock to his son, the result is the:"
Answer: The donor may incur a gift tax liability. Also, the cost basis will be $50 per share to the recipient of the gift.
Explanation:
From the question, we are informed that a customer owns 200 shares of ABC, that were bought 2 years ago at $50 per share and that the current market value of ABC stock is $60 per share.
If the customer gifts the stock to his son, the result is the donor may incur a gift tax liability. Also, the cost basis will be $50 per share to the recipient of the gift.
ABC Corporation, after many profitable years, declares a one-time special cash dividend of $10.00 per share. After the announcement, the stock is trading at $100 per share. Your customer holds 1 ABC Jan 110 Call. As of the ex date, the customer will have:
Answer:
1 ABC Jan 100 Call
Explanation:
Although the OCC does not usually adjust the strike price of listed options for regular quarterly cash dividends. This is because they are known quantity that are segmented by the market into options premium.
For special cash dividends, they are not a frequent event hence market does not recognize them. This special cash dividend is $10 per share × 100 shares = $1,000 value per contract. It therefore means that the $1,000 value per contract will be adjusted.
The new strike price will be
= 110 - 10 cash dividend
= 100. It also means that the number of shares covered by the contract does not change.
An annuity provides for 30 annual payments. The first payment of 100 is made immediately and the remaining payments increase by 8 percent per annum. Interest is calculated at 13.4 percent per annum. Calculate the present value of this annuity.
Answer:
$1423.38
Explanation:
number of payments ( number of years )(n) = 30
first payment = $100
interest calculated at : 13.4 % = 0.134
increment rate : 8 percent = 0.08
we can calculate the present value using this Equation
= (p / (r-g)) * [1 - [(1+g)/(1+r)]^n ]
where :
p / (r-g) = 100 / (0.134 - 0.08 ) = $1852
[1 - ((1+g)/(1+r)]^n ) = (1 - ((1.08/1.134)^30 ) = 0.7686
hence the present value of this annuity = $1852 * 0.7686 = $1423.38
Note :
p ( first principal payment ) = $100
r ( calculated interest ) = 13.4% = 0.134
g ( increment interest ) = 8 % = 0.08
You own a stock portfolio invested 34 percent in Stock Q, 18 percent in Stock R, 36 percent in Stock S, and 12 percent in Stock T. The betas for these four stocks are 1.03, 1.09, 1.49, and 1.94, respectively. What is the portfolio beta
Answer:
Portfolio beta = 1.3156
Explanation:
The portfolio beta is a function of the weighted average of the individual stocks betas' that form up the portfolio. To calculate the portfolio beta, we use the following formula,
Portfolio beta = wA * Beta of A + wB * Beta of B + ... + wN * Beta of N
Where,
w represents the weight of each stock in portfolioPortfolio beta = 0.34 * 1.03 + 0.18 * 1.09 + 0.36 * 1.49 + 0.12 * 1.94
Portfolio beta = 1.3156
Pressure tactics lead the other party to realize that the status quo is acceptable, and they make explicit the costs of not negotiating.
a. True
b. Fasle
Answer: b. False
Explanation:
Pressure tactics is described as to pressurize the other party to realize that the status quo is unacceptable, and they make the costs of not negotiating very explicit.
Pressure tactic is one of the influence tactics which focuses on using power by demanding compliance or using threats.
Hence, the given statement is false.
2. Which of the following is not an accurate statement as concerns competing in the markets of foreign countries? A. A multi-country strategy is generally superior to a global strategy. B. There are country-to-country differences in consumer buying habits and buyer tastes and preferences. C. A company must contend with fluctuating exchange rates and country-tocountry variations in host government restrictions and requirements. D. Product designs suitable for one country are often inappropriate in another. E. Market growth rates vary from country to country.
Answer:
A. A multi-country strategy is generally superior to a global strategy.
Explanation:
Foreign countries are the countries that are established in a foreign. Each and every foreign country has different consumer preference, buying power, taste and preferences.
Also there are no fixed exchanged rates plus the designs of the product are not fixed for another country as it depends on the customer demand which type of product they needed. Moreover, the growth rate is also different in different countries
Hence, option A is correct
How does technological change affect industry evolution? And how should firms manage product adoption and diffusion?
Answer:
How does technological change affect industry evolution?
Technological change greatly affects industry evolution. It is perhaps the most important factor in industry evolution, because technological advancements create new industries, and cause the death of other industries.
For example, the telephone industry replaced the telegraph industry, and the internet has made many technologies obsolete.
And how should firms manage product adoption and diffusion?
Firms should manage product adoption and diffusion in a strategic matter. Firms should look for new products with some anticipation in other to make a profit on customer and technological trends. Firms should also establish when to discard old products that are becoming obsolete in the market.
The firm is an all-equity firm with assets worth $350 million and 100 million shares outstanding. It plans to borrow $100 million and use these funds to repurchase shares. The firm’s marginal corporate tax is 21%, and it plans to keep its outstanding debt equal to $100 million permanently. If the firm manages to repurchase shares at $4 per share, what is the per share value of equity for the leveraged firm? A) $2.71 per share B) $3.5 per share C) $3.61 per share D) $3.71 per share E) $4 per share
Answer:
B) $3.5 per share
Explanation:
Assets = Existing assets + Tax shield
= $350 million + 21% * $100 million
= $371 million
Equity = Asset - Debt
= $371 million - $100 million
= $271 million
The Shares are repurchase at $4
At this price, the firm would have 100 - 100/4 = 75 million shares outstanding .
Worth of shares outstanding = Equity / Outstanding shares
Worth of shares outstanding = ($271 million / 75 million shares)
Worth of shares outstanding = $3.61 per shares
All of the following statements regarding convertible bonds are true except:_________.
A. Holders of convertible bonds can generally decide whether to convert to stock.
B. Holders of convertible bonds have the potential to profit from increases in stock price.
C. Holders of convertible bonds can choose when to convert to stock.
D. Holders of convertible bonds have the option to not convert and continue receiving bond interest payments and par value at maturity.
E. Holders of convertible bonds can choose how many shares of stock to receive at conversion.
Answer: Holders of convertible bonds can choose how many shares of stock to receive at conversion
Explanation:
A convertible bond is a debt security that yields the payment of interest, but can also be converted into equity shares or common stock that are predetermined.
The option that holders of convertible bonds can choose how many shares of stock to receive at conversion is wrong. This is because the number I shares that will be eventually converted will already have been fixed.
Research on women working in the corporate world indicates that one reason professional women leave their jobs is that the common corporate structure does not value:
Answer:
A. an interdependent worker.
Explanation:
Interdependent worker means the person who is handling the day to day operations of the business independently.
According to the given question, if the women are working in the corporate world than the chances of the leaving of their jobs is that the general corporate structure do not value them as an interdependent worker just because the person is a woman
Therefore the correct option is A
The monetary value of a homemaker's time CANNOT be estimated by
A. comparing the value of the services to the spouse's wage rate.
B. measuring the marginal value of the services by the homemaker's wage rate received in a part-time job.
C. measuring the services in terms of current market prices.
D. measuring the value of the services by looking at the homemaker's opportunity costs.
Answer: measuring the services in terms of current market prices
Explanation:
Based on the information that has been provided in the question, it should be noted that the monetary value of a homemaker's time can be estimated by
comparing the value of the services to the spouse's wage rate, measuring the marginal value of the services by the homemaker's wage rate received in a part-time job and also measuring the value of the services by looking at the homemaker's opportunity costs.
Therefore, the option that measuring the services in terms of current market prices is not estimated.
As a firm grows, it must support increases in revenue with new investments in assets. The self-supporting, or sustainable, growth model helps a firm assess how rapidly it can grow, while maintaining a balance between its cash outflows (increases in noncash assets) and inflows (funds resulting from increases in liabilities or equity). Consider the following case of Bohemian Manufacturing Company: Bohemian Manufacturing Company has no debt in its capital structure and has $300,000,000 in assets. Its sales revenues last year were $120,000,000 with a net income of $2,000,000. The company distributed $180,000 as dividends to its shareholders last year. Given the information above, what is Bohemian Manufacturing Company’s sustainable growth rate? 0.0601562% 0.5181384% 0.61% 4.1464268% Which of the following are assumptions of the sustainable (self-supporting) growth model? Check all that apply. The firm maintains a constant net profit margin. The firm’s liabilities and equity must increase at the same rate. The firm pays no dividends. The firm maintains a constant ratio of liabilities to equity.
Answer:
Sustainable growth rate = 0.67148%
The firm maintains a constant ratio of liabilities to equity.
Explanation:
Sustainable growth rate = ROE *Plow back Ratio / (1-ROE * Plow back Ratio)
When ROE = Net Income / Total Assets
= $2,000,000/$300,000,000
= 0.00667
Plow back Ratio = 1 - (Dividend / Net Income)
= 1 - ($180,000/$2,000,000)
= 1 - 0.09
=0.91
Sustainable growth rate = ROE * Plow back Ratio / (1-ROE * Plow back Ratio)
= 0.00667 * 0.91 / (1 - 0.00667 * 0.91)
= 0.0060697 / 0.9039303
=0.0067148
= 0.67148%
Therefore, the sustainable growth rate is 0.67148%
The firm maintains a constant ratio of liabilities to equity is the correct assumption for the sustainable growth model.
How is one product determined to specialize in between the two
Answer:
Specialization is a method of production whereby an entity focuses on the production of a limited scope of goods to gain a greater degree of efficiency. Many countries, for example, specialize in producing the goods and services that are native to their part of the world, and they trade them for other goods and services.
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What's the future value of an investment of $1 a year for each of 4 years, at the end of the last year? Suppose the interest rate is 8%.
Answer:
4.51
Explanation:
We have to calculate fva. The future value of annuity
Here is the formula
Fva = A [( + I)^n-1/I]
Where a = annuity
I = interest rate
N = number of years
Inserting into formula
1[(1+0.08)^4 - 1/0.08]
= 1[(1.36049 - 1)/0.08]
= 4.51
Therefore the future investment is $4.51
You purchased a stock at a price of $48.98. The stock paid a dividend of $1.63 per share and the stock price at the end of the year was $54.12. What was the total return for the year? Multiple Choice 13.82% 10.49% 13.17% 12.51% 3.33%
Answer:
13.82%
Explanation:
The computation of total return for the year is shown below:-
Total return = (End value - Beginning value + Dividend) ÷ Beginning value
= ($54.12 - $48.98 + $1.63) ÷ $48.98
= 6.77 ÷ $48.98
= 0.13821
or
= 13.82%
Therefore for computing the total return we simply applied the above formula by considering all the information given in the question
Dunstreet’s Department Store would like to develop an inventory ordering policy of a 95 percent probability of not stocking out. To illustrate your recommended procedure, use as an example the ordering policy for white percale sheets.
Demand for white percale sheets is 5,000 per year. The store is open 365 days per year. Every two weeks (14 days) inventory is counted and a new order is placed. It takes 10 days for the sheets to be delivered. Standard deviation of demand for the sheets is five per day. There are currently 150 sheets on hand.
How many sheets should you order?
Answer:
The number of sheets you should order is 219 sheets.
Explanation:
Before we can determine the number sheets to order, we need to first calculate the targeted number of sheet as follows:
TN = DD * (LT + RT) + z + SDD * [tex]\sqrt{LT + RT}[/tex] .......................... (1)
Where;
TN = Targeted number of sheets = ?
DD = Daily demand = 5,000 / 365 = 13.70
LT = Lead time = 10
RT = Review time or stock taking time = 14
SDD = Standard Deviation of Daily Demand = 5
z = 1.64
Note: Since Dunstreet’s Department Store would like to develop an inventory ordering policy of a 95 percent probability of not stocking out, the z is determined by just typing the function =NORM.S.INV(0.95) in the Microsoft Excel to obtain the 1.64.
Substituting the values into equation (1), we have:
TN = 13.70 * (10 + 14) + 1.64 * 5 * [tex]\sqrt{10+14}[/tex]
TN = 369 approximately
Since there are currently 150 sheets on hand, the number of sheets you should order can be determined as follows:
Number of sheet to order = TS - Number of sheets on hand = 369 - 150 = 219 sheets
Therefore, the number of sheets you should order is 219 sheets.
Answer:
219 sheets
Explanation:
The computation of the number of sheets ordered is computed by applying the following formula
Number of sheets ordered is
= Average daily demand × (Lead time + time taken) + Service probability × standard deviation in lead time - present inventory level
where,
Standard deviation in lead time is
= [tex]\sqrt{10+14(5)}[/tex]
= 24.49
And, the service probability level could be find out by applying the =NORMSINV(0.95) in excel so the value of z is 1.64
And, all other things would remain the same
= 5,000 ÷ 365 days × (10 + 14) + (1.64) (24.49) - 150
= 219 sheets
A practice, favored by unions, which contractually binds employers to hire only workers who are already members of the union is called a(n):
Answer:
The correct answer is: Closed Shop.
Explanation:
To begin with, the name of "Closed Shop" refers to a type of practice well known as "pre-entry closed shop" too that unions favored with the only purpose to obligate the companies to contract workers who are already members of the union itself so in that situation both the company and the union tend to have an agreement of maintaining certain salary price for the workers so they are not in a continous fight. Moreover, this practice allow the workers to be employed by the company only if they are members of the union and as long as they are members of it.
