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Piston Limited is a manufacturer of energy saving bulbs. To manufacture the finished product one unit of component 'LED' is required. Quarterly requirement of component
Piston Limited is a manufacturer of energy saving bulbs. To manufacture the finished product one unit of component 'LED' is required. Quarterly requirement of component "LED' is 18,000 units, the cost being 300 per unit. Other relevant details for the year 2018 are: Cost of placing an order: N2,250 Carrying cost of inventory: 12% per annum Maximum Lead time: 20 days Minimum Lead time: 8 days Maximum Consumption: 400 units per day Minimum Consumption: 200 units per day You are required to explain and calculate: i. Re-order quantity ii. Re-ordering level iii. Minimum stock level iv. Maximum stock level
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