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EX.8 A company manufactures 7,500 units of a product per month. Purchase price of the raw material is Rs.60 per kg. Cost of placing
EX.8 A company manufactures 7,500 units of a product per month. Purchase price of the raw material is Rs.60 per kg. Cost of placing an order is Rs.500. Carrying cost of inventory is 10% per annum. Re-order period is 5 to 8 weeks. Usage of raw material is as under: Normal Usage: 500 kg. per week; Minimum Usage: 250 kg. per week and Maximum Usage:750 kg. per week. You are required to calculate Re-order quantity and various stock levels.
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