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The XYZ Company Has an Assembly Plant in Cincinnati and Its

question 33

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The XYZ Company has an assembly plant in Cincinnati and its parts plant in Indianapolis.Parts are transported from Indianapolis to Cincinnati using trucks.Each shipment costs $100.The Cincinnati plant assembles and sells 300 finished products each day and operates 5 days a week and 50 weeks a year.Part #456 costs $50 and XYZ Company incurs a holding cost of 20 percent per year.How many of part #456 should XYZ Company put in each shipment? What is the cycle inventory of part #456 at XYZ Company?

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Definitions:

Income Tax

A tax levied by governments on individuals or entities' income, constituting a major source of government funding.

Present and Future Consumption

The concept of analyzing and balancing what is consumed today against what will be available or necessary for consumption in the future.

Efficient Taxation

A taxation system designed to minimize the economic costs or distortions that it imposes on society, while achieving desired revenue and distributional effects.

Excess Burden

The cost to society created by market inefficiency, typically due to taxes or government policies that distort resource allocation.

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