The following relates to inventory costs for ABC Ltd (i) Orders must be placed in multiples of

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The following relates to inventory costs for ABC Ltd

(i) Orders must be placed in multiples of 200 units.

(ii) Requirements for the year are 4,00,000 units.

(iii) The purchase price per unit is Rs. 4.

(iv) The carrying cost is 20% of the purchase price of goods.

(v) Cost per order placed is Rs. 25.

(vi) Desired safety stock is 20,000 units. This quantity is on hand initially.

(vii) Three days are required for delivery.

Calculate:

(a) EOQ

(b) How many orders the company place each year?

(c) At what inventory level should an order be placed?

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Cost Accounting

ISBN: 9788131732076

1st Edition

Authors: V. Rajasekaran, R. Lalitha

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Question Posted: Jun 12, 2024 10:13 AM

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The following relates to inventory costs for ABC Ltd (i) Orders must be placed in multiples of

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Cost Accounting

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