What order quantity will minimize the total inventory cost, Operation Management

Assignment Help:

Question:

You are the Operations Manager at Alien University and one of your responsibility is to manage the supplies of the University. One of your supplier has given you quantity discounts for the purchase of marker pens. The normal cost for the marker pen is Rs 5.00. For orders between 1,000 and 1.999 units, the unit cost drops to Rs 4.80; for orders of 2,000 or more units, the unit cost is only Rs 4.75. Furthermore, ordering cost is Rs 49.00 per order and from your records you found that the University uses 5,000 marker pens per year. You have estimated that the inventory carrying charge is 20% of unit cost.

a) What order quantity will minimize the total inventory cost?

b) Since your University is a good customer, the supplier has offered another price break. If you order 2,500 or more marker pens at a time, the unit cost drops to Rs 4.60. What is the optimal order quantity now?

c) Management of the Alien University is seeking your advice to improve inventory management at the University. Could you please suggest the types of inventory counting systems available and new technology for collecting data?


Related Discussions:- What order quantity will minimize the total inventory cost

Explain strategies to reposition medical personnel, During the 1980s, the g...

During the 1980s, the general populace of these countries deteriorated, even though several Latin American countries developed strategies to reposition medical personnel and servic

ASK, If you were the professor and you knew what was going through Vincent?...

If you were the professor and you knew what was going through Vincent?s mind, what would you say to Vincent?

Explain low customer contact and are capital intensive, What are companies ...

What are companies that have low customer contact and are capital intensive; yet provide a service, called?

Explain acceptability and vulnerability, Describe the four options highligh...

Describe the four options highlighted in the case in terms of their feasibility, acceptability and vulnerability.

Explain a company''s financial and operational requirements, Decisions abou...

Decisions about pay structure in global companies affects: Answer (1) a company's financial and operational requirements. (2) The cost and availability of qualified workers. (3) Th

Explain what is the annual holding cost, Your company manufactures turbine ...

Your company manufactures turbine blades for engines in production batches for each type. For one type of blade, the A39T, you have an annual demand of 10,000 units. It costs you $

Discuss fully collection credit company, 1. Elton is a limited partner in D...

1. Elton is a limited partner in Destiny Tours, a limited partnership. Collection Credit Company, a Destiny creditor, claims that Eton is subject to personal liability for Destiny'

Explain investment triple itself, At what rate of interest, compounded annu...

At what rate of interest, compounded annually, will an investment triple itself in (a) 8 years ? (b) 10 years? (c) 12 years?

Explain displayed letter strokes in centimetre, Assume you are going to giv...

Assume you are going to give a presentation to about 30 people in a medium sized room. In order to maximize the contrast, you used black letters on white background in your slides.

Explain collective bargaining process, Detail the five measures that unions...

Detail the five measures that unions have taken in the collective bargaining process to introduce provisions that would protect employees displaced or laid off due to technology ch

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