Project #30445 - Finance Homweork on Economic Order Quantity

 

Show all work:

 

 

Bad Dog Brewery is a small craft brewer making IPA’s in 180 gallon batches. Bad Dog brews once per week, each batch yielding 72 cases. They make great beer, but they are not great businesspeople. The Brewmaster / CEO currently places a weekly order for 72 cases of bottles thinking that will minimize his investment in inventory.

 

 

 

The cost per case is $11.99 on terms 1/7, net 30.

 

Shipping is $16 per order

 

Bad Dogs cost of Capital is 16%, yielding an Annual Carry Cost is $1.92 per case

 

 

 

 

 

  1. Should Bad Dog take advantage of the discount offered in the terms? What is the implied interest rate?

     

     

     

     

     

     

     

     

     

  2. Can you recommend a better ordering policy to minimize Bad Dog’s overall operating costs? What is the annual savings of your recommendation?

 

 

 

Subject Mathematics
Due By (Pacific Time) 05/08/2014 12:00 am
Report DMCA
TutorRating
pallavi

Chat Now!

out of 1971 reviews
More..
amosmm

Chat Now!

out of 766 reviews
More..
PhyzKyd

Chat Now!

out of 1164 reviews
More..
rajdeep77

Chat Now!

out of 721 reviews
More..
sctys

Chat Now!

out of 1600 reviews
More..
sharadgreen

Chat Now!

out of 770 reviews
More..
topnotcher

Chat Now!

out of 766 reviews
More..
XXXIAO

Chat Now!

out of 680 reviews
More..
All Rights Reserved. Copyright by AceMyHW.com - Copyright Policy