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Marvel Limited uses a large quantity of salt in its production process. Annual consumption is 60,000 tonnes over a 50-week working year. It costs `100
Marvel Limited uses a large quantity of salt in its production process. Annual consumption is 60,000 tonnes over a 50-week working year. It costs `100 to initiate and process an order and delivery follow two weeks later. Storage costs for the salt are estimated at 10paise per ton per annum. The current practice is to order twice a year when the stock falls to 10,000 tonnes. Recommend an appropriate ordering policy for Marvel Limited, and contrast it with the cost of the current policy.
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