Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hekmatia Dawa Khana uses Neem oil for one of Its Ayurbadiya drug. It requires 30 thousand litres of Neem oil annually. The oil must be

Hekmatia Dawa Khana uses Neem oil for one of Its Ayurbadiya drug. It requires 30 thousand litres of Neem oil annually. The oil must be purchased in multiples of 250 litres. ordering costs are Tk.550 per order. Annual carrying costs are 25 per cent of the purchase price of Tk.8 per litre. Hekmatia maintains a safety stock of 25,000 litres. The delivery time is 3 weeks (1 year = 52 weeks)

i. How many litres of the inventory should Hekmatia order to minimise its total cost? ii. At when inventory level should an order be placed to prevent having to draw on the safety stock? iii. What is the inventory's average, maximum, and minimum value?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The First Time Homebuyers Handbook

Authors: Dean Thompson

1st Edition

1658856112, 978-1658856119

More Books

Students also viewed these Finance questions