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Sarah Brown's Cosmetic Company is concerned with the stock of three type of perfume with the following data: Perfume I Annual demand 150 Product
Sarah Brown's Cosmetic Company is concerned with the stock of three type of perfume with the following data: Perfume I Annual demand 150 Product specific order 700 cost per order (Rs.) Unit Cost (Rs.) 500 Perfume II 1500 800 300 Perfume III 15000 500 150 There is a common transportation cost of Rs. 5000 per shipment and inventory carrying charge is 25% per annum. There is an option of Individual orders or Joint order. Suggest the best policy to the Decision Maker.
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Step: 1
To determine the best policy we can compare the total costs of Individual orders versus Joint orders for each type of perfume For Individual Orders 1 Calculate the Economic Order Quantity EOQ for each ...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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