100% tevredenheidsgarantie Direct beschikbaar na je betaling Lees online óf als PDF Geen vaste maandelijkse kosten
logo-home
Eerder door jou gezocht
Eerder door jou gezocht
logo
MAC3701 SUMMARY STUDY NOTES 2022 $3.20
In winkelwagen
Snel navigeren naar
Voorbeeld
  2.  
  3. University Of South Africa
  4.  
  5. MAC3701 - Application Of Management Accounting Techniques (MAC3701)

Samenvatting

MAC3701 SUMMARY STUDY NOTES 2022

1 beoordeling
 2 keer verkocht
  • Vak
  • MAC3701 - Application Of Management Accounting Techniques (MAC3701)
  • Instelling
  • University Of South Africa

MAC3701 SUMMARY STUDY NOTES 2022 STUDY UNIT 1 PLANNING AND CONTROLLING INVENTORY Cost of holding inventory is expensive – capital is needed to create suitable infrastructure (factory, staff, computers, stationery etc) and cash flow also needed for operational activities of entity. Investmen...

[Meer zien]

Voorbeeld 4 van de 119  pagina's

Document informatie

  • 2 augustus 2022
  • 119
  • 2022/2023
  • Samenvatting

Onderwerpen

  • mac3701 summary study
  • mac3701 summary study notes 2022
  • mac3701 summary study notes
  • mac3701 summary notes 2022
  • mac3701 summary study notes 2022 summary study notes 2022

Geschreven voor

  • University of South Africa
  • MAC3701 - Application Of Management Accounting Techniques (MAC3701)
Alle documenten voor dit vak (34)

1  beoordeling

review-writer-avatar

Door: thabedebathabile • 2 jaar geleden

Verkoper

avatar-seller
EXCELLENTNURSE

Ontvangen beoordelingen

Voorbeeld van de inhoud

MAC3701
SUMMARY
STUDY
NOTES 2022

,STUDY UNIT 1 PLANNING AND CONTROLLING INVENTORY

Cost of holding inventory is expensive –
capital is needed to create suitable infrastructure (factory, staff, computers, stationery etc)
and cash flow also needed for operational activities of entity. Investment in inventory and
inventory infrastructure is committed fixed costs which are managed over medium to long-
term.
Because of high costs and risks of holding inventory entity should keep inventory levels as
low as possible – also because any stock item has to be paid for.


Inventory Control
Basic Objective of inventory control is to release capital for more productive use.


For every type of item held in inventory, two questions must be asked:
1. When to order (When should a replenishment order be placed)
2. How much to order (what is the order quantity Q)?


Factors Involved In Inventory Analysis
1. Inventory related costs
1. Purchase (or production) costs
2. Ordering (or Setup) costs
3. Carrying (or Holding) costs
4. Shortage (or Stock out ) costs


Total cost = Purchase + Ordering + Carrying + Shortage


2. Demand
 Customer's demand, size of demand, rate of demand and pattern of demand is
important
 Size of demand = no. of items demanded per period
 Can be deterministic (Static or dynamic) or probabilistic (governed by discrete
or continuous probability distribution)
 The rate of demand can be variable or constant
 Pattern reflects items drawn from inventory -instantaneous (at beginning or
end) or gradually at uniform rate



© CTM Tutoring


, 3. Order Cycle
 The time period between placements of two orders having two types of review
systems:
 Continuous review
 Periodic review


4. Time Horizon
 The period over which inventory level will be controlled ...can be finite or
infinite.


5. Lead Time
 The time between ordering a replenishment and receiving into inventory ...can
be deterministic- constant or variable or probabilistic


6. Stock Replenishment
 The rate at which items are added to the inventory... an be instantaneous or
uniform rate




Economic Order Quantity


The economic order quantity (EOQ) is the quantity that minimizes the sum of these two costs.
It is based on the following assumptions:
1. The demand for the item is constant and known with certainty.
2. There are no upper or lower limits on the order quantity (lot size).
3. Stockouts are not permitted.
4. There are no quantity discounts.
5. Lead time and supply are known with certainty; lead time is constant.
6. Order quantities for individual items are made independently.




If we define
C - total annual (period) cost
S - fixed cost of placing an order
D - annual (period) demand
H - annual (period) unit cost of holding inventory

© CTM Tutoring


, Q – order quantity (to be determined)


The economic order quantity is calculated by


2SD
EOQ 
H
Answers the question “how much to order”

Example

ABC Ltd. is engaged in sale of footballs. Its cost per order is $400 and its carrying cost unit is
$10 per unit per annum. The company has a demand for 20,000 units per year. Calculated
the order size, total orders required during a year, total carrying cost and total ordering cost
for the year.




Solution

EOQ = SQRT(2 × 20,000 × 400/10) = 1,265 units

Annual demand is 20,000 units so the company will have to place 16 orders (= annual
demand of 20,000 divided by order size of 1,265). Total ordering cost is hence $64,000 ($400
multiplied by 16).

Average inventory held is 632.5 ((0+1,265)/2) which means total carrying costs of $6,325 (i.e.
632.5 × $10).




The EOQ is used as part of a continuous review inventory system, in which the level of
inventory is monitored at all times, and a fixed quantity is ordered each time the inventory
level reaches a specific reorder point. The EOQ provides a model for calculating s the
appropriate reorder point and the optimal reorder quantity to ensure the instantaneous
replenishment of inventory with no shortages. It can be a valuable tool for small business
owners who need to make decisions about how much inventory to keep on hand, how many
items to order each time, and how often to reorder to incur the lowest possible costs.




© CTM Tutoring

Dit zijn jouw voordelen als je samenvattingen koopt bij Stuvia:

Bewezen kwaliteit door reviews

Bewezen kwaliteit door reviews

Studenten hebben al meer dan 850.000 samenvattingen beoordeeld. Zo weet jij zeker dat je de beste keuze maakt!

In een paar klikken geregeld

In een paar klikken geregeld

Geen gedoe — betaal gewoon eenmalig met iDeal, Bancontact of creditcard en je bent klaar. Geen abonnement nodig.

Focus op de essentie

Focus op de essentie

Studenten maken samenvattingen voor studenten. Dat betekent: actuele inhoud waar jij écht wat aan hebt. Geen overbodige details!

Veelgestelde vragen

Wat krijg ik als ik dit document koop?

Je krijgt een PDF, die direct beschikbaar is na je aankoop. Het gekochte document is altijd, overal en oneindig toegankelijk via je profiel.

Tevredenheidsgarantie: hoe werkt dat?

Onze tevredenheidsgarantie zorgt ervoor dat je altijd een studiedocument vindt dat goed bij je past. Je vult een formulier in en onze klantenservice regelt de rest.

Van wie koop ik deze samenvatting?

Stuvia is een marktplaats, je koop dit document dus niet van ons, maar van verkoper EXCELLENTNURSE. Stuvia faciliteert de betaling aan de verkoper.

Zit ik meteen vast aan een abonnement?

Nee, je koopt alleen deze samenvatting voor $3.20. Je zit daarna nergens aan vast.

Is Stuvia te vertrouwen?

4,6 sterren op Google & Trustpilot (+1000 reviews)

Afgelopen 30 dagen zijn er 73429 samenvattingen verkocht

Opgericht in 2010, al 15 jaar dé plek om samenvattingen te kopen

Start met verkopen

Laatst bekeken door jou

Samenvatting ·

(1)

samenvatting medische statistiek

Samenvatting ·

(0)

Samenvatting keuzevak MBRT

Samenvatting ·

(0)

OCR A Level Law: Human Rights Law

Samenvatting ·

(0)

Samenvatting Statistiek met Excel

College aantekeningen ·

(2)

Christianity, Gender and Sexuality

Samenvatting ·

(0)

volledige samenvatting filosofie

Samenvatting ·

(0)

Tema&: Sistemas de un organismo

Samenvatting ·

(1)

Bedrijfsfinanciëring 21-22

Voordeelbundel ·

(0)

MSD 210 Notes and summary

$3.20  2x  verkocht
  • (1)
In winkelwagen
Toegevoegd