Rainbow Paints Inc. is a leading paints company in Pakistan. In June 2019, the higher management of the company deliberated and decided upon the production targets for the year 2020. The procurement department was directed to order the supplies of required chemicals and raw materials from Chinese company i.e. XingPe Chemicals for the target production. The supplies were expected to arrive in January-February 2020 but unexpected situation halted the normal operations in China due to the spread of a novel virus. The situation created panic at Rainbow Paints Inc. as lack of supplies meant falling short of the targets and plunging in losses. The supplier was contacted but they were of the view that they cannot send the supplies as per the contract due to the lockdown. Now, conflict aroused between the parties as Rainbow Paints Inc. wanted the raw materials which the XingPi Chemicals cannot process due to restrictions from their respective government. It resulted in losses for Rainbow Paints Inc. Rainbow Paints Inc. decided to consult an International arbitrator for the resolution of the dispute. During negotiations, the Rainbow Paints Inc. maintained that they faced losses due to lack of supplies which did not reach them at the promised time. So, the supplier must not only compensate for it but also return their payments. While XingPe Chemicals insisted that they couldn’t move ahead due to unexpected and unavoidable pandemic situation, so the losses must be shared. They also reiterated the resolve to provide supplies in the future without any delays if the situation permits. They insisted on keeping the contract intact while finding a middle ground for the current dispute. Requirement: After analyzing the case, Identify the approaches to negotiation maintained by both the parties in conflict i.e. Rainbow Paints Inc. and XingPi Chemicals and explain them as per the scenario.

Answers

Answer 1

Answer:

Rainbow Paints Inc., Pakistan Vs XingPe Chemicals, China

1. Win-Lose Approach:  Rainbow Paints Inc. was under an immense pressure to deliver on "production targets for the 2020."  However, it approached the negotiation aggressively and assertively, blaming the Chinese company for its failure to deliver the required chemicals for its production.  It did not care about the Coronavirus pandemic that is ravaging the world.  It should not be confrontational in its approach.  Business relationships are not maintained in such atmospheres.  It must think long-term and not short-term.  It should have tried to reduce its losses by minimizing its costs, using all possible means.  Rainbow Paints, in its blindness, is even seeking for not only a compensation but the return of their payments, to ensure that the Chinese company bears the losses wholly.  Such a negotiating strategy lacks common sense, fairness, and friendly business relationships.

2. Win-Win Approach:  XingPe Chemicals approached the negotiation, seeking understanding.  It cannot be blamed for the pandemic, unless it should have supplied before the outbreak.  Its approach contrasts with the confrontational, aggressive, and assertive method being followed by the Pakistani company.  Its approach is integrative and accommodating.  It is even willing to share the losses of Rainbow Paints while Rainbow Paints was trying to push all of the losses to it.

Explanation:

There are many approaches to negotiation.  Some prefer the Win-Lose, Lose-Lose, Compromise, or Win-Win approaches.  The best for long-standing business relationships is the Win-Win approach, because it integrates and accommodates the interests of both parties.  However, different situations call for the approach or combination of approaches to adopt.


Related Questions

Process A has fixed costs of $1000 and variable costs of $5 per unit. Process B has fixed costs of $500 and variable costs of $7.50 per unit. What is the crossover point between process A and process B? 50 units 250 units $9,500 $5,000 200 units

Answers

Answer:

200 units

Explanation:

The computation of the crossover point between process A and process B is shown below:

Let us assume the cross over point be x

We made a question i.e given below:

Total Cost of A = Total Cost of B

$1,000 + 5x =  $500 +7.50x

$1,000 - $500 = 7.50x - 5x

$500 = 2.5x

So, the x is 200 units

Hence, the cross over point is 200 units by applying the above formula so that the correct units could arrive

200 units are the correct option

When we computation of the crossover point between process A and process B is shown below:

Computation

Let us assume the cross over point be x

Total Cost of A = Total Cost of B

Then $1,000 + 5x = $500 +7.50x

Then $1,000 - $500 = 7.50x - 5x

Now $500 = 2.5x

So, the x is 200 units

Hence, the cross over point is 200 units by applying the above formula so that the correct units could arrive.

Find out more information about computation here:

https://brainly.com/question/24643173

ightweight personal locator beacons are now available to hikers, making it easier for the Forest Service's rescue teams to locate those lost or in trouble in the wilderness. True or False: Forest Service costs will likely rise due to moral hazard.

Answers

Answer: True

Explanation:

Moral Hazard refers to the tendency of entities to take on more risk than they usually would have if they have a way to mitigate that risk. As a result of hikers now having trackers, they will be found easily in cases of distress. This will encourage hikers to go deeper into the forest or engage in activity they would not have before because they know that the Forest Service will be able to help them. The new trackers will also encourage more people to start forest hiking as they will view it as safer.

When all these happen, the Forest service will have to increase it's size as well as conduct more operations which will cost money thereby increasing their cost.

Greenbrier Industrial Products' bonds have a 7.60 percent coupon and pay interest annually. The face value is $1,000 and the current market price is $1,062.50 per bond. The bonds mature in 16 years. What is the yield to maturity

Answers

Answer:

6.9%

Explanation:

To find the answer, you have to use the formula to calculate the yield to maturity:

Yield to maturity= (C+(F-P/n))/(F+P/2), where:

C= Coupon payment= $1,000*7.60%= $76

F= Face value= $1,000

P= Price= $1,062.50

n= Years to maturity= 16

Yield to maturity=(76+(1,000-1,062.50/16))/(1,000+1,062.50/2)

Yield to maturity=72,09/1,031.25

Yield to maturity=0.069 → 6.9%

Accoriding to this, the yield to maturity is 6.9%.

Assume your required internal rate of return on similar investments is 11 percent. What is the net present value of this investment opportunity? What is the going-in internal rate of return on this investment? Should you make the investment?

Answers

Answer:

Hello some parts of your question is missing attached below are the missing parts

You are considering the purchase of a small income-producing property for $150000 that is expected to produce the following net cash flows

End of year           cash flow

1                                 $50000

2                                $50000

3                                $50000

4                                $50000

Answer : a) $5122.28  (b)  12.59%  (c) You should make the investment

Explanation:

Internal rate of return = 11 %

initial cash flows = $150000

period = 4 years

Find the NPV (net present value )( using present value tables)

= preset value of cash flows - initial cash flows

= ∑ present cash flows for 4 years - $150000

= $155122.28 - $150000 = $5122.28

The going-in internal rate of return on investment

N (number of years ) = 4

pv  ( present value ) = $150000

PMT = -$50000

Fv ( future value ) = 0

IRR = 12.59% ( making use of the cash flow list in our financial calculator )

Andy views beer and pizza as complements to one another. If the price of pizza decreases, economists would expect Andy's demand for ____________.

Answers

Answer:

Andy's demand for beer will increase.

Explanation:

Andy’s demand for beer will increase because it is given that pizza and beer are complements. Therefore, there is an inverse relationship between the price of one complement goods and the number of other complement goods. Here, we can see that price of one good ( say pizza) decreases so the demand for other goods (say beer) will increase because there is an inverse relationship between these commodities.

se the following information for Jett Co. to answer the following question: 2015 2014 Sales 1,200 1,000 COGS 850 700 Operating Expenses 200 200 Income Taxes 30 35 Jett Co.'s gross profit, operating profit and net profit margins for 2015 are: A. 50.0%, 32.5%, 22.5% respectively. B. 29.2%, 12.5%, 10.0%, respectively. C. 27.0%, 11.0%, 10.5%, respectively. D. 21.5%, 17.5%, 12.0%, respectively.

Answers

Answer:

B. 29.2%, 12.5%, 10.0%

Explanation:

Gross Profit = Sales - Cost of goods sold / Sales

Gross Profit = $1,200 - $850 / $1,200

Gross Profit = $350 / $1,200

Gross Profit = 0.2917

Gross Profit = 29.17%

Operating profit = Sales - Cost of goods sold - Operating Expenses / Sales

Operating profit = $1,200 - $850 - $200 / $1,200

Operating profit = $150 / $1,200

Operating profit = 0.125

Operating profit = 12.5%

Net profit margin = Sales - Cost of goods sold - Income Taxes / Sales

Net profit margin= $1,200 - $850 - $200 - $30 / $1,200

Net profit margin $120 / $1,200

Net profit margin= 0.1

Net profit margin= 10%

Health and Wealth Company is financed entirely by common stock that is priced to offer a 12 percent expected return. If the company repurchases 20 percent of the common stock and substitutes an equal value of debt yielding 8 percent, what is the expected return on the common stock after refinancing

Answers

Answer: 13%

Explanation:

By substituting 20% of debt for debt yielding 8%, the company now has 20% financing from debt and 80% from equity.

The expected return on common stock after refinancing can be calculated by;

Return after refinancing = Return before refinancing + [tex]\frac{Debt}{Equity}[/tex](return before refinancing - Debt yield)

= 12% + [tex]\frac{0.2}{0.8} (0.12 - 0.08)[/tex]

= 13%

The five major decisions addressed by logistics managers are A. transportation, warehousing, location, reverse logistics, and third-party logistics. B. location, transportation, warehousing, reverse logistics, and tactical. C. strategic, third-party logistics, warehousing, transportation, and location. D. None of the above answers is entirely correct.

Answers

Answer:

C. strategic, third-party logistics, warehousing, transportation, and location.

Explanation:

A logistics manager is an individual who is saddled with the responsibility of the entire or overall supply chain management of goods produced by an organization. They are usually responsible for the distribution and supply of goods through out the manufacturing and finished process of delivering to final consumers.

The five major decisions addressed by logistics managers are

1. Strategic.

2. Third-party logistics.

3. Warehousing.

4. Transportation.

5. Location.

Allowance for Doubtful Accounts has a credit balance of $2,100 at the end of the year (before adjustment), and an analysis of customers' accounts indicates uncollectible receivables of $19,700. Which of the following entries records the proper adjustment for bad debt expense?

a. debit Bad Debt Expense, $21,800; credit Allowance for Doubtful Accounts, $21,800
b. debit Allowance dfor Doubtful Accounts, $17,600; credit Bad Debt Expense, $17,600
c. debit Allowance for Doubtful Accounts, $21,800; credit Debt Expense, $21,800
d. debit Bad Debt Expense, $17,600; crdit Allowance for Doubful Accounts, $17,600

Other receivables includes all of the followoing EXCEPT:

a. taes receivable
b. interest receivable
c. receivables from employees
d. notes receivabe

Answers

Answer:

1. Analysis of accounts receivables Allowance Required     $19,700

Less: Credit balance available in Allowance account           $2,100

Additional allowance required                                               $17,600

The journal entry will be as follows

                                                              DEBIT        CREDIT

Bad debt expenses                              $17,600

Allowance for doubtful accounts                            $17,600

Hence, the correct option is D.

2. Other receivables include all except "Notes Receivables"

Hence, the correct option is D

The risk-free rate of return is 3.2 percent and the market risk premium is 6.1 percent. What is the expected rate of return on a stock with a beta of 1.19? (round answer to whole number with two decimal points: i.e., use 1.23 percent instead of 0.0123)

Answers

Answer:

10.46%

Explanation:

The risk-free rate of return is 3.2%

The market risk premium is 6.1%

The stock beta is 1.19

Therefore, the expected rate of return on the stock can be calculated as follows

Rate of return= Risk-free rate+beta(market Risk premium)

= 3.2% + 1.19×6.1%

= 3.2% + 7.259

= 10.46%

Hence the expected rate of return on the stock is 10.46%

Torino Company has 1,200 shares of $10 par value, 5.5% cumulative and nonparticipating preferred stock and 12,000 shares of $10 par value common stock outstanding. The company paid total cash dividends of $500 in its first year of operation. The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is:

Answers

Answer:

$820

Explanation:

Dividend on Preferred Shares = 1,200 * 10 *5.5% = 660

Dividend in arrears for first year ($660 - $500)  = $160

Dividend for second year                                     = $660

Dividend to be paid to preferred shareholder = $820  

before common shareholders

Sharmer Company issues 5%, 5-year bonds with a par value of $1,000,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 6%. What is the bond's issue (selling) price, assuming the following factors: n= i= Present Value of an Annuity Present value of $1 5 5 % 4.3295 0.7835 10 3 % 8.7521 0.7812 5 6 % 4.2124 0.7473 10 3 % 8.5302 0.7441

Answers

Answer:

$957,349

Explanation:

the market price of the bonds = PV of face value + PV of coupon payments

PV of face value = $1,000,000 / (1.03)¹⁰ = $744,094

PV of coupon payments = $25,000 x 8.5302 (PV annuity factor, 3%, 10 periods) = $213,255

market price of the bonds = $744,094 + $213,255 = $957,349

journal entry to record the issuance of the bonds:

Dr Cash 957,349

Dr Discount on bonds payable 42,651

    Cr Bonds payable 1,000,000

Marley Investments, Inc. purchased 45% of the common stock of Beige Corporation on January 1, 2019, Beige Corporation reports a net income of $700,000 for the 2019 year.
Which of the following is the correct journal entry?
A. Equity Investments-Beige Corporation 315,000
Revenue from Investments 315,000
B. Revenue from Investments 315,000
Cash 315,000
C. Revenue from Investments 315,000
Cash 315,000
D. Revenue from Investments 315,000
Equity Investments-Beige Corporation 315,000

Answers

Answer:

A.

Debit Equity Investments-Beige Corporation 315,000

Credit Revenue from Investments 315,000

Explanation:

In the given scenario Marley Investment is purchasing 45% of common stock of Beige Corporation

Revenue for the year is $700,000

So the cost of purchase will be 0.45 * 700,000 = $315,000

Since Marley Investment is making an investment in Beige shares, it will debit it's Equity Investment for this amount ($315,000)

Equity investment are costs incurred when a business purchases securities.

After purchase of the shares the revenue can now be recognised by crediting the Revenue from Investment account.

Marley Investment is now a stakeholder in Beige Corporation

The exercise price on one of Chrisardan Companies call options is $20, its exercise value is $27, and its time value is $8. What are the options market value and the price of the stock

Answers

im gunna say say invest 15 dollars. i am not sure if thats what it wanted?

Two investment advisers are comparing performance. One averaged a 21% rate of return and the other a 18% rate of return. However, the beta of the first investor was 1.4, whereas that of the second investor was 1. a. Can you tell which investor was a better selector of individual stocks (aside from the issue of general movements in the market)? First investor Second investor Cannot determine b. If the T-bill rate was 7% and the market return during the period was 13%, which investor would be considered the superior stock selector? Second investor First investor Cannot determine c. What if the T-bill rate was 4% and the market return was 17%? First investor Second investor Cannot determine

Answers

Please answer please please thank you

The Cash account in the ledger of Clear Windows shows a balance of $12,596 at September 30. The bank statement, however, shows a balance of $16,253 at the same date. The only reconciling items consist of a bank service charge of $16, a large number of outstanding checks totaling $6,740, and a deposit in transit. Refer to the information above. What is the adjusted cash balance in the September 30 bank reconciliation

Answers

Answer:

Adjusted Cash Balance $ 12,596

Explanation:

September 30 Cash account  balance$12,596

 September 30 Bank statement,  balance  $16,253  

September 30 Difference in balances     $3657      

Clear Windows

Bank Reconciliation Statement  

September 30 Bank statement,  balance  $16,253  

less Outstanding checks $6,740,

Less Bank service charge  $16,

Add Deposit in Transit    $ 3099

September 30 Cash account  balance $ 12,596

Adjusted Cash Balance is the same as the cash book balance.

We start from the bank balance , dot the necessary adjustments and get the same cash book balance.

The rate of return on the common stock of Lancaster Woolens is expected to be 18 percent in a boom economy, 8 percent in a normal economy, and only 2 percent in a recessionary economy. The probabilities of these economic states are 12 percent for a boom and 10 percent for a recession. What is the variance of the returns on this common stock

Answers

Answer:

Variance of the return on this common stock is 0.15%

Explanation:

Note: See the attached excel file for the calculation of the variance of the returns on this common stock.

Note that the probability of a normal economy can be obtained as follows:

Probability of normal economy = 100% - Probability of a boom - Probability of a recession = 100% - 12% - 10% = 78%

These probabilities are used in the attached excel file.

Moss County Bank agrees to lend the Sunland Company $605000 on January 1. Sunland Company signs a $605000, 6%, 9-month note. What is the adjusting entry required if Sunland Company prepares financial statements on June 30

Answers

Answer:

DR Interest Expense $18,150

CR Interest Payable $18,150

Explanation:

June 30 would mean that 6 months have elapsed since the note was issued. The interest rate is an annual one so will have to be adjusted for 6 months.

The interest expense so far will be;

= 605,000 * 6% * [tex]\frac{6}{12}[/tex]

= $18,150

This figure is to be debited to the Interest Expense account to show that it is an expense and credited to the Interest Payable account.

Goodard Inc. planned to use $156 of material per unit but actually used $147 of material per​ unit, and planned to make 1,140 units but actually made 900 units. The sales−volume variance for materials is​ ________.

Answers

Answer:

2700, favorable

Explanation:

To calculate the sales-volume variance for materials, we use the equation as follows;

Sales-volume variance for materials = (Actual Price - Standard Price)*Aqual Quantity

sales-volume variance for materials = (147-150)*900

sales-volume variance for materials = 2700 Favorable

Marco was an economics major in college until he discovered he could major in strength and conditioning. Then he switched majors. Clearly, learning about this field is important to him. Mike and Bob are addressing

Answers

n the video, Marco says he was an economics major in college until he discovered he could major in strength and conditioning. Then he switched majors. Clearly, learning about this field is important to him. Mike and Bob are addressing ............... when they send Marco to seminars instead of, for example, increasing his salary in exchange for his continued high performance at MBSC. They could maintain Marco’s high level of motivation by:........................

A. Sending him on an all-expense-paid Caribbean cruise for two weeks

B. Reimbursing his tuition as he seeks a master’s degree in fitness management

C. Reassuring him that he has a job with MBSC as long as he performs well

D. Setting up an employee discount program at a nearby coffee shop, laundromat, and tasalon

Answer:

Valence

C. Reassuring him that he has a job with MBSC as long as he performs well

Explanation:

By sending Marco to seminars, Mike and Bob are addressing VALENCE;  a psychological value  an individual put on  another person, in relation to the attractiveness of individual whose a psychological value has been placed. In this case, a psychological value placed on Macro by his managers is the valuable rewards they would get from his professional development, rather than increasing his salary in exchange for high performance.

Therefore, they could maintain Marco’s high level of motivation by reassuring him that he has a job with MBSC as long as he performs well.

Benjamin Graham, the father of value investing, once said, "In the short run, the market is a voting machine, but in the long run, the market is a weighing machine." In this quote, Benjamin Graham was referring to the key difference between the "price" and the "value" of a security. In November 2006, Citigroup's stock (NYSE: C) was trading at $49.59. Following the credit crisis of 2007-2008 and by the end of October 2009, Citigroup's stock price had plummeted to $4.27. Several banks went under, and others saw their stock prices lose more than 60% of their value. Based on your understanding of stock prices and intrinsic values, which of the following statements is true?
a. A stock's intrinsic value is based only on the perceived risk of a stock.
b. A stock's intrinsic value is based on true investor returns.
Which of the following describe the reason(s) why maximization of intrinsic stock value benefits society.
a. Most investors prefer companies that can rise prices beyond reasonable levels.
b. Successful companies can avoid raising external funds in the financial markets.
c. successful companies higher more employees.
d. stock price maximization requires efficient, low-cost businesses.

Answers

Answer:

1- a. A stock's intrinsic value is based on true investor return.

2- a. Most investors prefer companies that can rise prices beyond reasonable levels.

b. Successful companies can avoid raising external funds in the financial markets.

Explanation:

Intrinsic value of a company's stock is the real value of stock which is based on systematic factors affecting the company. The factors affecting the intrinsic value of company are usually internal factors. The performance of company management, employee satisfaction and its operational efficiencies are the factor which drive intrinsic value of a company.

Holding other things constant, a decrease in the inflation rate in the US compared to the Canadian economy will cause the demand for the Canadian dollar to

Answers

Answer: To decrease, and the supply for Canadian dollar to increase.

Explanation: Inflation is an increase in the general price levels within an economy over a given period of time, when their is inflation in a given economy it causes the depreciation of the value of the currency of that economy and hence reduced demands for that currency and an increase in the supply for that currency which in this case is the Canadian dollar.

produces sports socks. The company has fixed expenses of $ 75 comma 000$75,000 and variable expenses of $ 0.75$0.75 per package. Each package sells for $ 1.50$1.50. Read the requirementsLOADING.... Requirement 1. Compute the contribution margin per package and the contribution margin ratio. Begin by identifying the formula to compute the contribution margin per package. Then compute the contribution margin per package. ​(Enter the amount to the nearest​ cent.) – = Contribution margin per unit

Answers

Answer:

Results are below.

Explanation:

Giving the following information:

Selling price= $1.5

Unitary variable cost= $0.75

First, we need to calculate the unitary contribution margin:

Contribution margin= selling price - unitary variable cost

Contribution margin= 1.5 - 0.75

Contribution margin= $0.75

Now, we can calculate the contribution margin ratio:

contribution margin ratio= contribution margin/selling price

contribution margin ratio= 0.75/1.5

contribution margin ratio= 0.5

Lola is responsible for redesigning work in her organization, and she frequently must persuade people to accept change, often not an easy task. She asks you for some tips. What advice do you give her

Answers

Explanation:

Organizational changes can occur for several reasons, it can be operational changes, inclusion of new technology, new procedures, new policies, etc.

So many employees may be resistant to change due to insecurities and lack of information.

Therefore, according to the scenario above, for Lola to convince people to accept changes in the work redesign, ideally, she should provide the necessary information so that employees are aware of the changes and feel included and necessary for it to happen. She can use various means of communicating the message, such as e-mail, panel, face-to-face meeting, etc., to be sure that she will create an environment of security and reliability of information, in addition to increasing persuasion by reinforcing an important message.

If actual overhead incurred during a period exceeds applied overhead, the difference will be a credit balance in the Factory Overhead account at the end of the period.
True or False

Answers

Answer:

faslee

Explanation:

plz mark Me As Brainleast ...

Crocetti Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 121 Budgeted unit sales (all on credit): January 7,000 February 7,500 March 11,900 April 14,900 Credit sales are collected: 40% in the month of the sale 60% in the following month The budgeted accounts receivable balance at the end of February is closest to:

Answers

Answer:

The budgeted accounts receivable balance at the end of February is closest to: $4,500.

Explanation:

Prepare a Accounts Receivable Budget for January and February

                                              January           February      

Balance b/d                                $0                $4,200

Credit Sales                           $7,000             $7,500            

Cash Received (40%)           ($2,800)          ($3,000)

Cash Received (60%)                $0               ($4,200)

Balance c/d                           $4,200             $4,500

Conclusion:

Therefore, the budgeted accounts receivable balance at the end of February is closest to: $4,500

how much would you have to earn each month to cover your living expense

Answers

Answer:

about $4,100 a month

Explanation:

Required information [The following information applies to the questions displayed below.] Hudson Co. reports the contribution margin income statement for 2017. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (11,500 units at $225 each) $ 2,587,500 Variable costs (11,500 units at $180 each) 2,070,000 Contribution margin $ 517,500 Fixed costs 360,000 Pretax income $ 157,500 1. Compute Hudson Co.'s break-even point in units and. 2. Compute Hudson Co.'s break-even point in sales dollars.

Answers

Answer:

1) Break-even point in units =8000  units

2) Break-even point (sales)  = $1,800,000  

Explanation:

Break-even point is the level of activity at which a firm must operate such that its total revenue will equal its total costs. At this point, the company makes no profit or loss because the total contribution exactly equals the total fixed costs.

Break even point in units is calculated using this formula:

Break even point in units = Total general fixed cost/ (selling price - Variable cost)

Break-even point in units = 360,000/(225- 180) = 8000  units

Break-even point in units =8000  units

2) Break-even point (sales) is computed as follows:

Break-even point (sales) =    Total general fixed cost/C/S ratio.

C/s ratio = (Selling price - variable cost)/Selling price ×  100

              = (225 - 180)/225 ×  100 = 20%

Break-even point (sales) = 360,000/20% = $1,800,000  

Break-even point (sales)  = $1,800,000  

1) Break-even point in units =8000  units

2) Break-even point (sales)  = $1,800,000  

A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.10 per stone for quantities of 600 stones or more, $8.50 per stone for orders of 400 to 599 stones, and $9.00 per stone for lesser quantities. The jewelry firm operates 110 days per year. Usage rate is 28 stones per day, and ordering costs are $48.

a. If carrying costs are $2 per year for each stone, find the order quantity that will minimize total

annual cost.

b. If annual carrying costs are 30 percent of unit cost, what is the optimal order size?

c. If lead time is six working days, at what point should the company reorder?

Answers

Answer:

a.385 stones

b.349 stones

c.168 stones

Explanation:

Order quantity that minimizes total annual cost is known as the Economic Order Quantity.

Economic Order Quantity = √(2 × Annual Demand × Ordering Cost per Order) / Holding Cost per unit

                                           = √(2×28×110×$48) / $2

                                           = 384.5 or 385 stones

Economic Order Quantity = √(2 × Annual Demand × Ordering Cost per Order) / Holding Cost per unit

                                           = √(2×28×110×$48) / ($8.10 × 30%)

                                           = 348.8 or 349 stones

Re-oder point is the point at which the order should be placed to obtain additional inventories

Reorder Point = Lead Time × Usage

                        = 6 days × 28 stones

                        = 168 stones

Sally goes to Honest Harry's used car lot to purchase a car. After test driving the car, she sits down to negotiate the contract. She asks about a warranty and Harry says that all cars that he sells come with a 30 day unconditional warranty on all parts and labor. She signs the contract and the next day the engine blows a rod. When she calls Harry she's told that there is no warranty according to the contract. She reads her contract and it says "as is"

Answers

Answer:

Sally can do very little in this case due to the parol evidence rule. In common law, the parol evidence rule limits what type of evidence one party can use in a court in order to support their arguments. In this case, Sally cannot present the evidence of an oral contract because it was previous to the signing of the written contract. This rule doesn't allow certain older evidence to be presented in order to support a change of an existing contract.

I.e. an individual cannot try to change the terms of a contact once they have been signed just because in older contracts certain parts were different.

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