The annual requirements for a particular raw material are 2,000 units costing Re. 1 each to the manufacturer. The ordering cost is Rs. 10 per order and the

The annual requirements for a particular raw material are 2,000 units costing Re. 1 each to the manufacturer. The ordering cost is Rs. 10 per order and the carrying cost 16% per annum of the average inventory value.

1. Based on the above

Find and explain the economic order quantity and the total inventory cost per annum.

Question 1 Answer:

EOQ =

Total Inventory Cost per annum = Rs.

The costs of placing an order are Rs. 150 per order. It is estimated that 1000 units will be used in the next 12 months. The carrying cost per month is Rs. 2.50. Assuming that the demand is deterministic and continuous and that no stock-outs are allowed, determine the optimal order quantity.

2. Based on the above, explain the following

What is the time between the placing of orders?

The procurement lead time is one month.

What is the re-order point based on the on-hand inventory level?

Question 2 Answer

EOQ =

Time between orders =

Re-order Point =

Share This Post

Email
WhatsApp
Facebook
Twitter
LinkedIn
Pinterest
Reddit

Order a Similar Paper and get 15% Discount on your First Order

Related Questions

An important aspect of a change management strategy is to consider how different alternatives may impact future outcomes. Organizations often use the

An important aspect of a change management strategy is to consider how different alternatives may impact future outcomes. Organizations often use the business case method to explore strategic alternatives as it helps simulate a real situation. Such simulations help with identifying business issues and provide critical information that organizations can

Module 1 – CasePersonality and MotivationAssignment OverviewApplying Motivational Theories Herzberg posits that motivation is influenced by hygiene

Module 1 – CasePersonality and MotivationAssignment OverviewApplying Motivational Theories Herzberg posits that motivation is influenced by hygiene factors (which can demotivate if absent) and motivators (which can boost satisfaction when present). You will provide insights into motivation for a multi-generational workforce. Using the framework of McGregor’s Theory X and Theory

Module 1 – CasePersonality and MotivationAssignment OverviewApplying Motivational Theories Herzberg posits that motivation is influenced by hygiene

Module 1 – CasePersonality and MotivationAssignment OverviewApplying Motivational Theories Herzberg posits that motivation is influenced by hygiene factors (which can demotivate if absent) and motivators (which can boost satisfaction when present). You will provide insights into motivation for a multi-generational workforce. Using the framework of McGregor’s Theory X and Theory

ListenMBA 620 Project Guidelines and RubricCompetencies In this project, you will demonstrate your mastery of the following competencies:Prepare and

ListenMBA 620 Project Guidelines and RubricCompetencies In this project, you will demonstrate your mastery of the following competencies: Prepare and present internal and external reports. Monitor and evaluate performance. Recommend opportunities for performance improvements. Scenario You are a former pilot, and you are now the controller of a division of

MBA 580 Project Guidelines and RubricCompetencies In this project, you will demonstrate your mastery of the following competencies:Evaluate creative an

MBA 580 Project Guidelines and RubricCompetencies In this project, you will demonstrate your mastery of the following competencies: Evaluate creative and innovative organizational structures Recommend alternative innovations to solve an internal or market need Implement creative and innovative processes within an organization Overview Companies that are innovative must make sure