questions 2

Part A Slane Ltd wishes to get a better understanding of how much stock it should hold in it stores and how much stock it should order to maximise efficiency. The following details are available: You are a student who has been deployed in the stores department to review efficiency and stock controls. You have ascertained the following information about the organisation's main raw material: - Minimum usage........... 150 units per day. Maximum usage........... 600 units per day. Average usage............. 450 units per day. Total projected usage... 28,000 units per quarter. Lead time.................... 3 - 5 days. Cost per order............. 60 Unit Cost................... 55 Carrying cost.............10% of materials cost per annum. Requirement: a) To assist with an efficiency review, calculate the following stock control ratios: (i) Economic order quantity. (ii) Stock re-order level. (iii) Minimum stockholding level. (iv) Maximum stockholding level. (3 Marks) (3 Marks) (3 Marks) (3 Marks) Part B Management is considering introducing an incentive scheme for staff working in production. Employees work a 40-hour week and are paid 12 per hour. Their units of output is as follows: Staff member Tom: 330 units Staff member Louise: 390 units Staff member Ciara: 460 units You are required to: a) Calculate the basic pay for each employee. (2 Marks) b) Calculate the wages paid to each employee if a piecework scheme is introduced. The piecework rate is 0.90 per unit and employees are guaranteed 80% of their basic pay. State the amount each staff member will receive in wages. (5 marks) c) Calculate the wages paid to each employee if a premium bonus scheme is introduced. The standard time taken to complete each unit is 6 minutes and the bonus of 80% is paid on the time saved. d) Calculate the efficiency rating of each employee. (3 Marks) (3 Marks)