Question
Dabuo electrical warehouse is the sole agent for LG electronic gadgets.it is currently faced with rising and enormous demand for its wares. It is however
Dabuo electrical warehouse is the sole agent for LG electronic gadgets.it is currently faced with rising and enormous demand for its wares. It is however saddled with lack of warehouse space to meet this growing demand. A total 36,000 square feet will be required to meet its annual demand/ The following information explains the present situation; TV sets HFS MWO Total Selling price per unit 120 100 60 - Purchase price per unit 60 50 30 140 Transport cost per unit 10 5 3 18 Insurance per unit 8 10 4 22 Rental of warehouse 12 8 4 24 Commission on sales per unit 10 12 7 29 Salaries of warehouse manager 6 2 3 11 VAT per unit 20 13 10 43 Cost per unit 126 100 61 287 The maximum space available is only 24000 square feet. Storage space required for a unit of TV, HFS, MWO is 6,2 and 1 square feet respectively. Estimated annual sales demand is squared off at 4000 units per product per annum. Management of the warehouse of considering the optimum number of products to stock in order to maximize product from its limited space. Required: Advice management.
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