Question
A local TV repairs shop uses 36,000 units of a part each year (A maximum consumption of 100 units per working day). It costs P20
A local TV repairs shop uses 36,000 units of a part each year (A maximum consumption of 100 units per working day). It costs P20 to place and receive an order. The shop orders in lots of 400 units. It cost P4 to carry one unit per year of inventory.
- Calculate the current total annual ordering cost
- Calculate the current total annual ordering cost,
- Calculate the current total inventory cost
- Calculate the Economic Order Quantity
- How much is the savings after imposing EOQ?
- How much is the reorder point assuming normal lead time of 3 days?
- If you are expecting 2 days delay, how much is the safety stock?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To calculate the various costs and quantities we can use the following formulas and information Annual demand D 36000 units Maximum consumption per wo...
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Step: 3
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Practical financial management
Authors: William r. Lasher
5th Edition
0324422636, 978-0324422634
