Reference no: EM132629361

QUESTION 1

Pustaka Mutiara Sdn. Bhd purchase pens from a supplier in Lembah Klang. The  supplier sells the pens to the bookstore at RM2.00 per unit. The cost for the book store to place an order is RM23 and the inventory carrying cost is RM0.10 per unit per month. The manager estimates that the daily sales will be 134 units and the store open for 240 days in a year. The lead time from the time of order placement until receipt is 3 days. The company keep 5 days usage of safety stock.

1. Calculate the optimal/economic order quantity,

2. Calculate number of order

3. Calculate time between orders

4. Calculate quantity of safety stock

QUESTION 2

Ray's Satellite Emporium wishes to determine the best order size its best-selling plate, model TS111. Ray has estimated the annual demand for this model at 1,000 units. His cost to carry one unit is RM1.25 per unit per year and he has estimated that each order cost RM5 to place. Ray's Satellite Emporium operates business 365 days per year and finds that deliveries from his dealer generally take 5 working days.

1. What is the economic order quantity (EOQ)?

2. How many orders would he made each year?

3. What is the time between orders?

QUESTION 3

The KK ICT Sdn Bhd purchases 8,000 transistors each year for components in minicomputers. The unit cost of each transistor is RM10, the cost of carrying one transistor in inventory for a year is RM3 and ordering cost is RM30 per order. This company operates 200 days in a year and generally suppliers take 5 days to deliver the stock.

1. Calculate the optimal order quantity, number of order and the time between orders.

2. Calculate the reorder point with safety stock of 1 day.