Detrmine the economic order quantity, Operation Management

Assignment Help:

Question:

(a) ‘Stock is often said to be the biggest evil in any business, yet firms still keep stocks.' Discuss the reasons for keeping stocks.

(b) Discuss the main costs involved in keeping stocks.

(c ) The demand per month for a spare part is 200 units. The storage space cost per unit per year is Rs20. The cost for ordering the spare part is Rs35 per order. Each unit of the spare part is Rs150 and interest rate is at 10%.

(i) Detrmine the economic order quantity.

(ii) Find the total cost.

(iii) The purchasing manager got an offer of a discounted price of Rs140 per unit if he orders in lot sizes of 600. By performing the necessary calculations indicate whether he should shift to the new policy instead of using the EOQ.


Related Discussions:- Detrmine the economic order quantity

Explain bottleneck operation by adding a new machine, A small firm intends ...

A small firm intends to increase the capacity of a bottleneck operation by adding a new machine. Two alternatives, A and B, have been identified, and the associated costs and reven

Explain differences between management and leadership, Suppose you realize ...

Suppose you realize one day that you are dissatisfied with your job. What might you do to improve your situation? What are the basic differences between management and leadership?

Explain the key factors in effective project control, Identify and describe...

Identify and describe the key factor(s) in effective project control.

Explain strategic business plan, You have been working for some time at Uni...

You have been working for some time at Unique Shoes, a local shoe store that specializes in unusual shoe designs and custom fitting. Currently, customers come to the store to selec

Explain the bargaining unit as technical workers, Jack is a 2nd level manag...

Jack is a 2nd level manager at Johnson Controls. His department includes 2 supervisors, 5 night shift security guards, 5 technical workers, 10 janitorial staff, and 25 manufacturin

Explain an in-n-out pay strategy, An In-N-Out Pay Strategy: Costa Vida's De...

An In-N-Out Pay Strategy: Costa Vida's Decision to Boost Pay

Explain what quantity should these cookies be produced, Father's Cookies pr...

Father's Cookies produces chocolate-chip cookies in a large oven that holds up to 2,000 pounds of cookies at a time. Annual demand is constant at 200,000 pounds; variable cost is $

Explain situational or behaviorial interview, Contrast an unstructured with...

Contrast an unstructured with a situational or behaviorial interview. Also, discuss how an organization might improve the reliability and validity of the interview

Explain original linear programming problem, Create your own original Linea...

Create your own original Linear Programming problem with a minimum of two variables and two constraints. Your problem should be presented in paragraph form and reflected in a LP eq

Explain key dimensions of the general environment, Compare and contrast the...

Compare and contrast the key dimensions of the general environment, the task environment and the enacted environment of an organization.

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