QUESTION 32 5 points Save Answer The Tangent Corporation wants to move 500 freez
ID: 366878 • Letter: Q
Question
QUESTION 32 5 points Save Answer The Tangent Corporation wants to move 500 freezers this year from its plant to its warehouse and then to its own retail store. Freezer per working day. The plant shipped 10 shipmen collected nts of 50 units each to the warehouse over the course of the year and shipments of 4 units to the retailer. The following data has been demand at the local retail store has averaged 4 units PRODUCT CHARACTERISTICS Seling Price Variable Manufacturing Cost Product Weight- Product Size- $5,000/Freezer 3,000/Freezer 700 Lbs Unit 100 Cubic Feet per Unit WAREHOUSING COSTS: Based on the space occupied by wcserage nventon SPACE OCCUPIED BY RATE 2per cubic oot $3 per cubic foot AVERAGE INVENTORY s than 1,000 cublc feet 1,000 to 2,000 cubic feet 001 and over per cubic foot The anmal warehouse cost i O A.$5,000 O B. $7.500 OC $8,900Explanation / Answer
Demand rate is 4 units per working day. Considering 250 working days in a year, annual demand = 250*4 = 1000 units. But Tangent corporation shipped only 500 units from its plants. So demand is not met.
Each shipment of 50 units will last for 50/4 = 12.5 days
So annual average inventory = (Quantity shipped/2) * Number of days demand met * number of shipments in a year/ Number of working days in a year = (50/2)*12.5*10/250 = 12.5
Spcae occupied = 12.5*100 = 1250 cubic feet
Applicable rate is $ 3 per cubic feet
Annual warehouse cost = 1250*3 = $ 3,750