# Exam practice questions. Show work step by step

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oyvmm003

## Description

I need help with the attached business questions. There are 13 questions in total. The final solution is listed on the last page. I need step by step work to be shown for the questions, (explanation of how to obtain the answers) so I can solve similar questions by myself.

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hello, attached is the paper with all the solutions. let me know if you require some more explanations made

Solutions
10.1 measuring inventory turnover
a. 2015 inventory turnover
Inventory turnover = Cost of goods sold / average value of inventory
COGS = 358,000,000 /
Average inventory = 15,700,000 + 4,500,000
= 20,200,000
Inventory turns = 358,000,000 / 20,200,000
= 17.72
b. 2015 weeks on hand
Weeks on hand = (1 / inventory turns) x 52
= 1/17.72 x 52
= 2.93
c. 2015 days on hand
Days on hand = (1 / inventory turns) x 365
= (1/17.72) x 365
= 20.59

10-2 periodic review policy
Safety stock = 50 packs
Annual demand = 2,750
Ordering cost = 2
Holding cost = 1
Stock level = 5
Q = R-I
Where R is the restocking level
I is the inventory level at time of review

Q = 50 – 5
= 45
10-3
a. Calculate EOQ
EOQ = (2FD/C)1/2
Where F is the Fixed Cost Per Order = \$15
C is the carrying cost per unit per year = \$2
D is the demands in units per year = 4,000 bags
EOQ = ((2 x 15 x 4000) / 2) ½
= (60,000)½
= 245
b. Reorder point
ROP = dl
where d is demand per day = 4000/365
l is the lead time = 15
ROP = 4000/365 x 15
= 164.4
10-4 comparing order quantity marginal costs
Order size = 25 cases
Annual holding cost = \$10 /case
Ordering cost per order = \$48
Annual demand = 2,000 cases
Orders per year = 2000/25 = 80
Total ordering cost = orders per year x fixed ordering cost
= 80 x 48 = 3840
Total holding cost = Average inventory x...

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