A Company Uses 2,750 Per Year of a Certain Subassembly

question 43

Essay

A company uses 2,750 per year of a certain subassembly that has a purchase cost of $450, and an annual holding cost of $500 per unit.Each order placed costs $150.The company operates 300 days per year and it has found that an order must be placed with the supplier 12 working days before it can expect to receive that order.For this subassembly, find:
(a)the economic order quantity.
(b)the reorder point.

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Definitions:

Mixed Sale

A transaction that involves both goods and services, requiring different legal considerations than the sale of pure goods or services alone.

Uniform Commercial Code (UCC)

A statutory source of contract law in the United States applicable to transactions involving the sale of goods. The UCC was created in 1952 and adopted by all 50 states, the District of Columbia, and the Virgin Islands; it may be modified by each state to reflect the wishes of the state legislature.

Service-Warranty Test

A legal analysis used to determine whether a transaction involves a service contract or a warranty under consumer protection laws.

Voidable Title

A legal concept where the title to property or goods is valid until annulled by a court, often due to fraudulent or improper actions during the acquisition.