Calculate the economic order quantity, Operation Management

Assignment Help:

The Managing Director of Beauty Soaps Ltd just visited a soap manufacturing firm in Malaysia and he was immensely impressed by its raw materials stock management System. He wanted his Operations manager to implement the just-in-time stock management system in his unit in order to eliminate all the costs associated with keeping stocks. For the Operations manager the local conditions are not conducive for the implementation of such a system. The main raw materials are sodium palmitate noodles, colour and perfume, imported from Malaysia. Wrappers and cartons are produced locally.

(a) Discuss the various costs associated with keeping costs.

(b) Discuss the conditions to be present in order to enable the successful implementation of just-in-time stock management system.

(c) A trader expects to sell about 300 units of a component per month. The storage space taken up by one unit of the product is estimated at Rs 30 per year. The cost associated with ordering is Rs 65 per order and interest rates are expected to be 10% per year. Each unit costs Rs 50.

(i) Calculate the economic order quantity ?
(ii) Calculate the total cost of the component for one year.
(iii) A supplier came up with an offer of supplying the same component at Rs 40 per unit, if the ordering quantity is 600 units per order. Should the trader accept the order?


Related Discussions:- Calculate the economic order quantity

Calculate mape for each data set, DO different forecasting techniques (F1 a...

DO different forecasting techniques (F1 and F2) were used to forecast demand for cases of bottled water. Actual demand and the two sets of forecasts are as follows: PREDICTED DEMAN

Explain milestones and key deliverables, When developing the milestone sche...

When developing the milestone schedule for the project charter it is helpful to identify relatively few milestones and key deliverables

Explain two operations-related tasks carried out by firm, Identify two oper...

Identify two operations-related tasks carried out by Hard Rock Café

What mechanisms are available for conflict resolution, Question 1: (a) ...

Question 1: (a) "Alone of all non-western countries Japan has become a modern society, because her reforms based the new "Westernised" behaviour on traditional Japanese values

Assignment, transformation process in an organization

transformation process in an organization

Explain things never to say to women executives, Go to www.diversityinc.com...

Go to www.diversityinc.com and search for "Things Never to Say to Women Executives". List three examples and provide a one page explanation regarding how these statements undermine

Explain what is an industry, What is an industry? (a) Industry is a grou...

What is an industry? (a) Industry is a group of diverse businesses under common owners. (b) Industry is a group of firms whose products have same and similar attributes such

Who are involve in top management, Who are involve in top management ? T...

Who are involve in top management ? Top management level involves Board of Directors, Chief Executive and General Manager and Managing Directors.

Explain bottom-up and top-down estimating approaches, What are the differen...

What are the differences between bottom-up and top-down estimating approaches? Determine advantages and disadvantages for using each approach. Under what conditions would you prefe

Explain occasional spills of fatigue and flu, You are a busy partner in a l...

You are a busy partner in a legal firm, and an experienced administrative assistant complains of continued headaches, drowsiness, dry throat, and occasional spills of fatigue and f

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd