Question
Apex Engg Co is engaged in manufacture of certain parts for the automobile industry. Its annual requirement of a particular component is 18,000 units. The
Apex Engg Co is engaged in manufacture of certain parts for the automobile industry. Its annual requirement of a particular component is 18,000 units. The Ordering Cost is Rs 2,000 per order, Inventory Carrying cost is Rs 50 per unit per annum. Lead time from order to delivery is ten days. In view of the large requirement, a vendor has offered quantity discounts to Apex as follows:
Quantity of each order (no. of units) | Price per unit, Rs |
---|---|
1000 2999 | 300 |
3000 - 4499 | 292 |
4500 + | 291 |
Calculate the following: a) EOQ b) Optimum Reorder Quantity c) No. of orders per year at the Optimum Reorder Quantity(10)
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