Raw materials cost for part is 150 and value added in, Ask an Expert

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Q. Terminator, Inc., manufacturers a motor cycle part in lots of 250 units. Raw materials cost for part is $150, and value added in manufacturing 1 unit from its components is $300, for a total cost per completed unit of $450. Lead time to make part is 3 weeks, and annual demand is 4,000 units. Assume 50 working weeks per year.

a. How many units of part are held, on average, as cycle inventory? What is its value?

b. How many units of part are held, on average as pipeline inventory? What is its value?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9307896

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