Explain the facts on which economic order quantity is depend, Operation Management

Assignment Help:

Explain the facts on which Economic Order Quantity is depend

Economic Order Quantity depends on two costs:

 (i) Inventory procurement costs which consists of expenditure connected with

* Obtaining quotations

* Processing Purchase Requisitions

* Expediting and Following up Purchase order

* Receiving materials and after that inspecting them Processing Invoices Procurement costs of seller reduce as the order quantity raises.

  (ii) Carrying Costs that vary with quantity ordered contains 

* Interest on capital investment

* Cost of storage services

 * Cost including deterioration and obsolescence

* Cost of insurance and property tax etc.

 Carrying costs are approximately directly proportional to the order size or lot size quantity.


Related Discussions:- Explain the facts on which economic order quantity is depend

What is the process mapping, What is the process mapping? Process map...

What is the process mapping? Process mapping: For processes to be enhanced they should first be demonstrated. Flow charts can help the use of process mapping as an exampl

Explain the organizational structure that results, Describe the organizatio...

Describe the organizational structure that results from each of the different bases of departmentalization?

SWOT analysis of McDonald''s order process, Please help with SWOT analysis ...

Please help with SWOT analysis of Mcdonald''s ordering process

What is delegation, What is delegation? There is a limit to what a part...

What is delegation? There is a limit to what a particular can perform single-handed. After a point, the other persons working in the organisation have to be connected for perfo

Explain customer spend at the service desk, Sharp Discounts Wholesale Club ...

Sharp Discounts Wholesale Club has two service desks, one at each entrance of the store. Customers arrive at each service desk at an average of one every six minutes. Sharp Discoun

Explain creation of a microsoft project file, Creation of a Microsoft Proje...

Creation of a Microsoft Project File Follow the instructions below to create a small project file to submit to your instructor. Instructions: Load Microsoft Office Project 2007 "tr

Assignment 2000 words, Assignment EITHER A. Practical application of concep...

Assignment EITHER A. Practical application of concepts in a local organisation • You are required to analyse and evaluate a key aspect of operations management covered in this subj

Describe what is the economic order quantity, The Central Valve Company sel...

The Central Valve Company sells industrial valves and fluid control devices. One of Central's most popular valves, the Western, has an annual demand of 6,000 units. The price of ea

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